[Congressional Record (Bound Edition), Volume 157 (2011), Part 14]
[Senate]
[Pages 19779-19812]
[From the U.S. Government Publishing Office, www.gpo.gov]




  PROPOSING AN AMENDMENT TO THE CONSTITUTION RELATIVE TO REQUIRING A 
                BALANCED BUDGET--S.J. RES. 24--Continued

                                 ______
                                 

    PROPOSING AN AMENDMENT TO THE CONSTITUTION OF THE UNITED STATES 
       RELATIVE TO BALANCING THE BUDGET--S.J. RES. 10--Continued

  The PRESIDING OFFICER (Mr. Webb). The Senator from Vermont.
  Mr. LEAHY. Mr. President, it occurs to me that all Senators swear an 
oath to support and defend the Constitution of the United States. I 
carry a copy around with me. It is our duty. It is our responsibility. 
But the pending amendments to the Constitution that are on the floor of 
the Senate threaten the constitutional principles that have sustained 
our democracy for more than 200 years.
  In addressing the Nation's debt and deficit, what is lacking are not 
phrases in our Constitution. What is lacking is the seriousness within 
today's Congress to act, and the willingness in Congress to cooperate 
in forgoing solutions that meet the real needs of our country and its 
people. These are human failures, not the failure of our constitutional 
framework. Nor are these failures insoluble or inherent. We balanced 
the budget and even created budget surpluses less than two decades ago.
  Now we are being asked to put the problem once again under the pillow 
for another day--this radical partisan proposal would be out of place 
in our national charter.
  Never in our history have we amended the Constitution--the work of 
our Founders--to impose budgetary restrictions that require 
supermajorities for passing legislation. Yet now it seems every Member 
on the other side of the aisle has joined to put forth a radical 
proposal to burden our Constitution with both of these kinds of 
strictures.
  The Hatch-McConnell proposal is different in kind than any other 
amendment to our Constitution. It is not consistent with the design of 
our founding document or the stance taken by our Founding Fathers.
  It is a bad idea to write fiscal policy into our Nation's most 
fundamental charter. It is simply unnecessary. We do not need a 
balanced budget amendment to balance a budget. A vote for this 
amendment does absolutely nothing to get our fiscal house in order. 
Congress can work to continue our economic recovery. We can pass the 
appropriate legislation that leads to a Federal balanced budget, just 
as we did in the early 1990s.
  I remember that very well because I was here. I remember, in this 
body, not a single Republican voted to balance the budget. It took the 
Democrats in the Senate and the Vice President of the United States to 
pass that balanced budget. Not a single Republican voted for a balanced 
budget in the House. They gave a lot of speeches on the floor that if 
we passed that balanced budget amendment, everything would come to a 
screeching halt. Actually, what happened was we passed it, and 
President Clinton was able to leave his successor a huge surplus.
  With a growing economy, with what we did by votes in the House and 
the Senate--not by a constitutional amendment--we were able to create 
significant budget surpluses and pay down the debt until those 
surpluses were squandered. We have done it before. We can do it again. 
We need only work together to make the tough decisions, not to pass 
something that is a feel-good, bumper-sticker kind of item which kicks 
the can down the road and binds future Congresses to a fiscal proposal 
that is fundamentally unsound and the consequences of which are not 
understood.
  The Republican proposal in the Senate is significantly more radical 
than the version the House of Representatives rejected in a bipartisan 
vote last month. In fact, the Hatch-McConnell constitutional amendment 
is the most extreme of all the pending proposals. The proposal, by its 
terms, will neither balance the budget nor pay down the Nation's debt, 
something everybody says they want. Instead, at a time of partisan 
brinksmanship that has led to the first-ever downgrading of our 
country's credit rating this summer and when ideological gridlock is 
the Republicans' operating principle, it would require supermajorities 
to pass legislation for the first time in our Nation's history. It 
would require a supermajority to raise the debt ceiling in times of 
economic crisis. Did we learn nothing from the disaster we went through 
last summer, which should have been a routine lifting of the debt 
ceiling and became a political free-for-all for weeks and months, cost 
the American taxpayers billions of dollars and caused people to lose 
their retirement money in the stock market? Do we want to do that 
again? I hope the Senate rejects this proposal.
  Two weeks ago, the Judiciary Committee's Subcommittee on the 
Constitution held a hearing to examine the Hatch-McConnell proposal. 
All those witnesses, including those who were invited by the measure's 
cosponsors, presented thoughtful critiques of this extreme proposal and 
voiced serious concerns about its wording. Even Republican cosponsors 
discussed possible

[[Page 19780]]

changes to the language in order to better achieve their goals. This is 
not the proposal that Senator Hatch previously favored. This is one of 
more than two dozen pending versions. In fact, we were not told which 
of the many versions of the proposal would be pending until yesterday. 
This proposal has not been considered by the Constitution Subcommittee 
or the Judiciary Committee. The House of Representatives has already 
voted down a less-extreme version of this proposal by a bipartisan 
majority. Yet here is the Senate of the United States, being forced to 
vote on some proposal for a constitutional amendment without doing any 
of the hard work or the votes that are expected to accompany an 
amendment to America's Constitution. This is no way for the Senate to 
proceed on a proposed constitutional amendment. This is not some feel-
good resolution. We are talking about amending America's charter.
  The Hatch-McConnell proposal contains many problematic provisions and 
it leaves many significant questions unanswered. Section 10 of this 
proposal relies on estimates for outlays and receipts. We know that 
economists' estimates and recommendations do not always agree. So what 
do these proposed constitutional provisions really mean? We know that 
estimates are not static but ever changing. What if during the course 
of a fiscal year, there was a natural disaster, a terrorist attack, or 
a shift in the economy? What then? What if estimates were recalculated 
or revised, as employment statistics are every month? Would that make 
every penny expended by the Government over a revised estimate 
unconstitutional? Would that mean we could not help disaster victims or 
could not respond to a terrorist attack?
  Another provision would limit total outlays for each fiscal year to 
18 percent not 16, not 20, not 17.9 of the previous year's Gross 
Domestic Product (GDP). But who is to decide what the ``GDP'' was for a 
particular time period? What is to be included and what is not? How 
often do those estimates and artificial constructs get revised? Since 
when do economic surveys and shifting estimates belong in the 
Constitution? And what policy decision justifies the constitutional 
permanence of the number 18? I note that not even the budget proposed 
this year by Representative Ryan and the House Republicans, with all 
its draconian cuts and the end of Medicare as we know it, would satisfy 
this arbitrary 18 percent of GDP limit. None of the budgets proposed by 
or passed under President Reagan, not one, would have satisfied this 
proposal. At the end of the Bush administration we survived the worst 
economic downturn since the Great Depression and are now in economic 
recovery. This is not the time to enact such a measure which would take 
us in the wrong direction. We cannot ``cut'' our way to a balanced 
budget without imposing great suffering. It would tank the economy 
rather than aid our continuing recovery.
  Besides its arbitrary nature, limiting outlays to 18 percent of the 
previous year's GDP would leave Congress unable to respond swiftly and 
effectively to economic downturns and natural disasters. The Hatch-
McConnell proposal would require a two-thirds supermajority to spend in 
excess of 18 percent of the previous year's GDP for a specific purpose. 
Filibusters and requirements for supermajorities have become routine to 
the detriment of the American people. They have stymied congressional 
action on behalf of the American people. This proposal would give a 
minority in Congress even more power to hold the country and our 
economy hostage. Have we not seen what that can mean? Have the lessons 
of the last year been lost on the Senate?
  The Hatch-McConnell proposal would make permanent bad policy choices. 
Section 4 is a transparent attempt to enshrine tax breaks for 
millionaires and wealthy corporations by requiring a two-thirds 
supermajority to impose any new tax or even to close existing tax 
loopholes. We need a balanced approach to fix the deficit problem. And 
the wealthiest among us are those who least need a heavy hand on the 
scales in favor of their interests.
  Let's look at what has happened. We have fought two unfunded wars. It 
is the first time in our history that we not only did not pass a tax to 
pay for a war we are in but actually passed a tax cut and borrowed 
money to pay for these wars. We squandered the surpluses the last 
administration inherited, ran up deficits and the national debt.
  I would remind everybody, we can achieve a balanced budget. We have 
done it before. Working with President Clinton, Democrats in Congress 
voted for a balanced budget. But I don't want to hear lectures from the 
other side, when every single Republican voted no the last time we had 
a successful balanced budget. Our strong economy in the Clinton years 
led to budget surpluses. If we are serious about reducing the deficit 
and paying down our debt, we need to get to work improving our economy, 
getting Americans back to work, and continuing to recover from the 
worst economic conditions since the Great Depression.
  One of the most glaring problems with this proposal is it provides no 
clear enforcement mechanism or standards for enforcement. Section 8 of 
the Hatch-McConnell proposal expressly prohibits courts from increasing 
revenues to enforce the amendment, but remains silent on judicial 
enforcement of the amendment by cutting spending. This proposal assumes 
our Federal courts are equipped to enforce this amendment. Do we want 
to say we will simply relinquish Congress's constitutional power of the 
purse to an unelected judiciary with no budget experience--something no 
Congress, Republican or Democratically controlled--has ever done 
before? Do we want judges deciding fiscal policy? Do we want judges to 
decide whether we cut Social Security or Medicare?
  I recently asked Justice Scalia at a hearing before the Senate 
Judiciary Committee whether the Federal judiciary was equipped to 
handle such a task--the same task my friends on the other side of the 
aisle want the Federal judiciary to do. Do you know how he answered? He 
laughed. He indicated that budget issues and determining the allocation 
of resources is not the judiciary's proper role. Of course he is right, 
and I expect this is one area where all nine members of the Supreme 
Court would have answered the same. The proponents of this effort to 
transform courts into budget-cutting bodies are wrong. The Republican 
proposal does not even make clear who, if anyone, has standing to bring 
such challenges in court. None of these questions has been adequately 
debated or considered. Such a drastic change to the time-honored role 
of the judicial branch of our government should not be written into our 
Constitution presumptuously.
  In addition to all these concerns, the American people need to 
understand what the real-world effect of such an amendment would be on 
their daily lives. In the Senate Judiciary Committee, we received 
alarming testimony from the president-elect of AARP, warning of the 
damaging effects such a constitutional amendment would have on Social 
Security, Medicare, and Medicaid. He testified that if such a 
constitutional amendment were in place today, the average Social 
Security benefit would be cut by 27 percent. Maybe that is what Members 
of this body want to do, cut Social Security by 27 percent. I do not. 
Do they want to balance the budget on the backs of hard-working, lower 
income, and elderly Americans by drastically cutting the safety net? I 
would say that is not the answer to our economic challenges, especially 
as we continue to give tax breaks to millionaires and continue to fight 
unfunded wars.
  The notion of amending the Constitution to require a balanced budget 
is not new. The Senate rejected balanced budget amendments in 1995, 
1996, and 1997. We proved after the Reagan and Bush administrations had 
tripled the national debt that we could through hard work and 
legislation, balance the budget. That is what Congress did in the late 
1990s. We helped create hundreds of millions of dollars in surpluses 
that were paying down the national debt. Those surpluses were 
squandered

[[Page 19781]]

by tax cuts for the wealthy and two unfunded wars. That is the cause of 
our budget imbalance.
  We should not, for the first time in American history, amend the 
Constitution to set fiscal policy. It is a bad idea. It is even more 
irresponsible to consider doing so when we do not yet understand the 
full weight of the consequences of who is going to bear the burden.
  I have never seen the solemn duty of protecting the Constitution 
treated in such a cavalier manner as it is today. I have heard many say 
they revere the Constitution. Let us show it the respect it deserves 
rather than treating it like a blog entry or a bumper-sticker slogan. 
Let us not be so vain in this body to think we know better than our 
Founders and better than the constitutional Framers who preserved our 
liberties for more than 200 years.
  Our constitutional principles have served the test of time. They 
deserve protection. I will stand with the Constitution. I will stand 
with the Constitution of this country, and I will oppose this ill-
conceived proposal to amend it.
  I ask unanimous consent to have printed in the Record my full 
statement, and I yield the floor.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, I have the good fortune of serving with 
Senator Leahy on the Senate Judiciary Committee. He is the chairman; I 
am the ranking Republican. In that capacity, we have jurisdiction over 
constitutional amendments. So I rise to support S.J. Res. 10, which is 
cosponsored by all 47 Republicans.
  I am very pleased we are taking up a balanced budget amendment. The 
Senate has passed a balanced budget amendment in the past. More 
recently, it has come close to passing a balanced budget amendment.
  I regret that this amendment has not become law. I believe that had 
the Constitution been amended to require a balanced budget, we would 
not be faced with the dire budgetary situation that is before us--a 
$1.5 trillion deficit for each of the last 2 or 3 years, and maybe as 
far as we can see into the future if we don't get things under control.
  The balanced budget amendment before us is very straightforward. It 
provides that total outlays shall not exceed total receipts unless each 
House of Congress, by a two-thirds vote, agrees to do otherwise. It 
provides spending discipline. Total outlays cannot exceed 18 percent of 
gross domestic product unless two-thirds of both Houses of Congress 
vote to waive the cap. The President will be required to submit a 
balanced budget to the Congress.
  To avoid balancing the budget by imposing tax burdens, new taxes or 
increases in total revenue can be imposed only by a two-thirds vote of 
both Houses, and the debt limit will be able to be raised only with 
concurrence of three-fifths of both Houses.
  To provide a level of flexibility in wartime--and that would call for 
considerable flexibility because wars are never predictable--the 
provisions on outlays and receipts, total outlays, and the debt limit 
can be overcome by less than the normal two-thirds vote by a three-
fifths vote.
  To minimize disruption, the amendment will not take place for 5 
years.
  Finally, the courts cannot enforce the balanced budget amendment by 
ordering a tax increase.
  Reverence for the Constitution is a sentiment we all share. But the 
Constitution provides for an amendment process. When it is necessary, 
each generation has amended the Constitution when a guarantee of free 
speech or the abolition of slavery or giving women the right to vote 
required a constitutional amendment. No one has said reverence for the 
Constitution was the end of the matter.
  We have reached that point of necessity with the balanced budget 
amendment. The Congressional Research Service reports--and I wish to 
quote a fairly long quote:

       The budget deficit each year from 2009 to 2011 has been the 
     highest ever in dollar terms, and significantly higher as a 
     share of GDP than at any time since World War II. Under 
     current policies, the Federal debt is projected to grow more 
     quickly than the GDP, leading observers to term it 
     unsustainable.

  That is the end of the quote from the CRS.
  The very purpose of the Constitution, according to its preamble--and 
I know the preamble is not governing on anything we do or what the 
Supreme Court does, but it shows intention--the preamble was meant to 
extend the blessings of liberty to ourselves and our posterity--and I 
want to emphasize that word ``posterity.'' It is because the growth in 
the national debt is unsustainable, as I read from the Congressional 
Research Service, that our posterity may not receive the blessings that 
several generations of Americans so far have received. It is hard to 
imagine an amendment more in keeping with the goals of the Constitution 
than this one. Otherwise, runaway debt will expand exponentially. A 
permanent spiral can be created in which the debt feeds on itself. We 
are kind of in that spiral right now. Is it permanent? I sure hope not.
  Take a look at Europe today, where we ought to learn lessons about 
the lack of fiscal soundness. Nations there risk default when they 
overspend, and they are in that position of almost default now. If we 
are not careful, our country, the United States, at some point will 
face the same crisis. It is frightening to contemplate, and 
particularly frightening as a threat to the blessings we ought to give 
to generations after us.
  We hear from opponents that Congress can balance the budget now 
without a balanced budget amendment, but the fact is it cannot. For 
more than 40 years, Congress has been unable to summon the ability to 
balance the budget. Statutes that sought to provide a path to a 
balanced budget failed.
  Let me speak here about a personal involvement I had when I was a 
Member of the other body, working with Senator Harry Flood Byrd of 
Virginia. The Byrd-Grassley amendment was adopted in either 1979 or 
1980. It was a statute that was just a few words. It said Congress 
can't spend any more money than it takes in.
  Do you know what happened? For several years after that until it was 
finally repealed in the early 1990s, Congress delayed it for a year at 
a time as part of the appropriations process. So statutes are not a 
good way of making this happen. Gramm-Rudman was probably a little more 
successful, at least once or twice, but it soon was repealed. By 
putting something in the Constitution requiring a balanced budget, it 
is going to discipline Congress in a way that statutes cannot provide 
discipline; in other words, a constitutional amendment will succeed 
where statutes have been proven to have failed based upon the examples 
I gave and other examples that can be given.
  The only exception was when we had 3 years going into this century 
when a financial bubble provided windfall revenues. We all know about 
that. I believe it is $568 billion we paid down on the national debt 
for 4 fiscal years after a Republican Congress was elected in 1994.
  Anyway, except for that, we have not been able to have very sound 
fiscal policy. Then because Congress has been unable to control 
spending, the budgets have been in deficit and the national debt has 
increased. The only way Congress will exercise the discipline to 
balance the budget is if the Constitution forces it to do so.
  We can say this from some experience, particularly if you believe the 
States are the laboratories of our political process and of government 
policy, because 46 State constitutions require their budgets to be in 
balance. They meet that requirement. As Members of Congress, we do take 
an oath to adhere to and defend the Constitution. We take that oath 
seriously. If the balanced budget amendment became part of the 
Constitution, we would adhere to it or face the consequences from the 
voters.
  This amendment wisely contains effective tax limitations as an 
integral part. I have favored a balanced budget with tax limitations 
for more than 20 years. For decades, Federal spending has far outpaced 
even the steady and sizable growth in taxes and revenues. Raising taxes 
does not produce surpluses. The historical fact is they spur

[[Page 19782]]

more spending. For every additional dollar in taxes Congress has raised 
since World War II, it seems as though it has given us a license to 
spend about $1.13 for every $1 that has come in for additional taxes.
  Don't take my word for that. A person who studied that for a long 
period of time, Professor Vedder, of Ohio University, has written about 
that. You will find his figures just about the same. I think he said on 
average since World War II, $1 coming into the Treasury was a license 
to spend $1.17 instead of the $1.13 I give here.
  Raising taxes, then, would make balancing the budget harder, not 
easier. Bring a dollar in here, spend $1.13. You hardly get ahead. It 
seems we cannot ever reach an agreement of how high taxes have to be in 
this body to satisfy the appetite of Congress to spend money. That is 
not just a Democratic problem, that is a problem on both sides of the 
aisle here in Congress.
  That brings us to this issue about a supermajority requirement for 
tax increases. A balanced budget amendment may well encourage tax 
increases, fueling greater spending and the continuation of additional 
debt and costs in servicing that debt. The failure to balance the 
budget is a fiscal issue of greatest importance.
  But getting back to our obligations to posterity under our 
Constitution, it is also a moral issue. Maybe the moral aspects of it 
are more important than the economic aspects of it. Without a balanced 
budget amendment, our children and grandchildren will pay for this 
generation's chronic inability to live within its means. We live high 
on the hog and worry about our children and grandchildren paying for 
it.
  In the absence of an amendment, the standard of living of future 
generations will likely decline. The fears of many Americans that the 
next generation will not live as well as this one are in many respects 
traceable to decades of fiscal irresponsibility on the part of 
Congress. This balanced budget amendment would mean a stronger economy. 
It would surely mean good government, as fiscal responsibility ought to 
be a part of good government. Obviously people are concerned now about 
the problem of jobs. Employers are particularly concerned that Congress 
does not have a sound fiscal policy. That leads them not to hire 
anybody. A balanced budget is going to mean more jobs.
  I believe the American people are willing to do their part to prevent 
future generations from being saddled with an unconscionable level of 
debt. They are willing to do so even if it means that some Federal 
spending they support would be affected. This is especially true if our 
budgeting is done fairly.
  I believe if one listens closely to the arguments of the opponents of 
this measure, one will hear more arguments against a balanced budget 
than against a balanced budget amendment. There will need to be 
difficult actions taken. It is those difficulties that have prevented 
Congress from balancing the budget. Those difficulties are, therefore, 
reasons for a constitutional amendment, not reasons against a 
constitutional amendment. But balancing the budget is necessary and it 
will take an amendment to the Constitution of the United States of 
America to make sure it is done consistently.
  We also hear arguments about the need to run deficits when the 
economy is in a recession. That kind of brings us to where we are right 
now. We have been in a recession for 3 years. The amendment before us 
permits Congress to vote to run a deficit in that situation, but be 
skeptical of that argument. If deficits and debt gave us a strong 
economy, right now we would be in the midst of the greatest economic 
boom in our history. Obviously we are not in that economic boom. 
Deficits of $1 trillion-plus and a national debt of $15 trillion are 
not stabilizing the economy in the way that people who argue that maybe 
in a time of recession you ought to have a lot of deficit spending have 
claimed.
  In fact, I believe the size of the deficit and debt is one reason the 
economy is not performing well. The size of looming deficits and debt 
is another. The markets are not viewing the debt as stabilizing a weak 
economy. Rather, they view it correctly as a drag on the economy. That 
is why jobs are not being created. That is why corporations have $1 
trillion in their treasuries in the United States, $1 trillion in their 
treasuries overseas, $2 trillion that is not being spent, that is not 
making corporations any money. It is lying there. They want to invest 
it in jobs and machinery and get the economy going and make more money.
  On the issue of enforcement, the opponents attack straw men. They say 
either that the amendment cannot be enforced, so it is toothless, or 
they say the courts will enforce it, leading to chaos. Both of these 
arguments cannot be true. This amendment will be enforced by the 
President submitting a balanced budget and Congress complying with the 
amendment, as do State legislators all over the country. Members take 
an oath and voters will punish those who do not obey the constitutional 
command.
  With respect to the courts, the text of the amendment prohibits 
courts from raising taxes. Of course, judicial standing requirements, 
ripeness, and the doctrine of political questions will mean that the 
courts will continue to lack the power of the purse, as has been the 
case throughout 225 years of history of our country.
  In the past dozen years, Congress has been unable to balance the 
budget even when times are good. Had we passed a balanced budget 
amendment when it was before us in the past, we would not have racked 
up the huge deficits that now confront us.
  We have heard in the past that a balanced budget amendment was not 
necessary because Congress could balance the budget on its own. We know 
how successful Congress has been doing that. Those arguments were 
wrong. Today we face one of the worst debt pictures in our history. If 
nothing is done, the future will be even worse. We owe a responsibility 
to the American people and to future generations to maintain the fiscal 
discipline that has allowed us to be the world's biggest economy.
  Our pleas for a balanced budget amendment have been denied by its 
opponents in the past. We warned at that time what road lay ahead if we 
failed to pass a balanced budget amendment. Time has unfortunately 
proved us right. It is not too late if we act now, but time is growing 
shorter each year.
  I urge my colleagues to do the right thing and enact a constitutional 
requirement that the budget be balanced.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Colorado.
  Mr. UDALL of Colorado. Mr. President, I rise to speak in favor of 
legislation I have authored to amend the United States Constitution to 
require that Congress balance the Federal budget. The Senate's debate 
on the balanced budget amendment, which will occur over the next few 
days, is an incredibly important debate. It is a debate that will spark 
a wide range of emotions and it will test our policies, goals, and 
philosophies. Thus, I want to recognize at the outset that we hold 
strong and differing opinions about the wisdom of adding a balanced 
budget amendment to our U.S. Constitution. Amending the Constitution is 
not something any of us in the Senate takes lightly. In fact, we have 
only amended our Constitution some 27 times in the history of our 
Nation. Our Founding Fathers in their wisdom designed the Constitution 
to discourage amendments. They created a high hurdle to clear before an 
amendment can be passed by the Congress and ratified by the States.
  I intend today to make a case for why my proposal, which has been 
cosponsored by several of our colleagues, meets that elevated standard. 
Today I aim to explain why this balanced budget amendment will help 
restore the fiscal health of our Nation, protect our national security, 
and spur our future competitiveness in the global economic race.
  Let me start by discussing some basic facts that color this debate. 
First, our government debt now totals over $15 trillion. That is 
$48,000 for every man, woman, and child in our

[[Page 19783]]

country. Let me say that again: $48,000 for every man, woman, and 
child. Moreover, we borrow 40 cents of every dollar that the Federal 
Government spends. The total amount of public debt now held by us 
equals 68 percent, almost 69 percent, of our gross domestic product. 
That reflects a level rarely seen in our country's history.
  Finally, in August of this year, one of the major credit agencies 
downgraded our Nation's credit rating because of Congress's inability 
to work in a bipartisan manner to reduce our debt. I don't think I have 
to tell the viewers that the last thing our struggling economy or job 
creation efforts needed was that downgrade. It is little wonder that 
Americans hold us in such low regard or that other countries wonder 
what we are doing in the Nation's Capitol.
  I could go on and on, but I will not. These facts are appalling 
enough to most Americans. These are hard-working Americans who balance 
their checkbooks on a weekly and monthly basis. It is appalling to me 
that Congress is so unable to resist the temptation to spend without 
limit while also trying to keep taxes as low as possible. We have even 
been willing to watch the debt grow to a level where national security 
experts are telling us that our own self-created problem is a bigger 
threat than any of our enemies.
  In the last several years Congress has taken steps to try to reach an 
agreement on how to reduce our deficit and pay down our debt. Many of 
us have spent countless hours working in bipartisan groups to chart a 
commonsense balanced debt reduction plan. I have not given up hope that 
we may eventually reach a comprehensive plan to cut spending, reform 
the Tax Code, and shore up programs such as Social Security and 
Medicare which are critical to our Nation's middle class. To give up on 
that goal would be to say to hard-working Americans, we are not serious 
about ensuring that the American dream is within everyone's reach. 
After watching Congress struggle to reach even a basic plan to cut 
spending or reasonably raise new revenues to pay our bills, I am 
convinced we need additional tools that force fiscal discipline. If we 
don't put limits on how Congress does its budgeting, the question won't 
be whether we can stop the bleeding, it will be how much do we cut to 
the bone or even into vital organs the programs that we value. In other 
words, without some fundamental reforms now, the foundations of our 
government will be severely weakened later.
  To be sure, a balanced budget amendment will not solve the problem on 
its own, but a reasonable balanced budget amendment would help us 
ensure we never get into this position again. Passing my middle-ground, 
commonsense balanced budget amendment would send a strong signal to the 
financial markets, U.S. businesses, and the American people that we are 
serious about stabilizing our budget for the long term. That is the 
signal they want to see to give them the confidence to expand and 
create jobs.
  Before I move to making the case for specifics in my balanced budget 
proposal, I want to make a few points about exactly how our 
skyrocketing national debt affects all of us. As a start, our debt 
threatens investments we need to make. It harms our ability to compete 
with countries around the world, it inhibits job growth here at home, 
and it dampens our innovative spirit. If we don't address our debt now, 
it would sap the economic power that has enabled our Nation to become 
the most powerful force on the globe.
  Throughout most of our history--perhaps aside from the Great 
Depression--our economic strength has enabled the United States to 
create an environment that is good for business. This strength has then 
helped our own people on our Main Streets thrive in communities all 
over Colorado and across our Nation, and it has meant that every 
generation has been able to build on their parents' success, seize 
opportunity, and live the American dream. We all know this is what has 
made the United States exceptional. But today across our great country, 
families are wondering whether the American dream is still within their 
reach. Whether you are a college graduate and living at home because 
you are unable to find a job or a middle-aged factory worker laid off 
for the second or the third time struggling to pay your bills, our 
economic future seems a bit tougher.
  Our country has endured a terrible economic slump for over 3 years 
now. In order to move quickly to turn things around, we need businesses 
to hire again. Business and community leaders across Colorado and 
elsewhere have told me that in order to have the confidence to do that, 
they need to know our national debt is not poised to send our economy 
off a cliff. The cochairman of President Obama's bipartisan commission 
on debt reduction tapped into that sentiment and called our debt a 
cancer that is eating away at our economic health. Beyond pure economic 
factors, our growing debt burdens us more broadly.
  The former Chairman of the Joint Chiefs of Staff, for whom we all 
have enormous respect, ADM Mike Mullen, warned that our national debt 
is ``the single biggest threat to our national security.'' By now these 
are familiar arguments here on the floor of the Senate. We know the 
challenges that confront us. The problem is Congress is not doing what 
every economist and every one of us in this body acknowledges we must 
do, and that is get our out-of-control budget under control. We all 
have our theories for why this is the case. I personally believe that 
part of the problem is the nature of Congress itself. We are all 
temporary single Members of a greater body. We each have our own 
constituents, goals, and responsibilities. It is sure tempting to come 
to Washington, fight like hell for our corner of the Nation, and lose 
sight of or willfully ignore the bigger picture. As Members of 
Congress, it seems as if we are hardwired to fight for results that are 
important to our constituents and our political ideologies.
  Let me give you a couple of examples. Democrats are reticent to 
support meaningful adjustments in entitlement spending, and many of my 
Republican friends turn a blind eye to the revenues needed to support 
retiring baby boomers and our national security needs.
  My father, who had the great privilege of serving for 30 years in the 
House of Representatives as a Congressman from southern Arizona, 
witnessed this same phenomenon several decades ago, and he used to 
recall the advice that was given to freshmen House Members. That advice 
was: ``If you want to get ahead in Congress, do two things--vote for 
every appropriations bill and against every tax bill.''
  In many ways the Federal budget deficits we face are so daunting 
today because too many Members of Congress have taken that advice 
literally over the past decades, but also because it is what Americans 
expected of us. It is only natural that people want the best of both 
worlds. We cannot continue down this budgetary path and hope that the 
results will be any different than they have been in the past.
  In fact, the results get worse by the day. Based on what I hear from 
Coloradans, our constituents are now ready to make a little sacrifice. 
They are ready for us to make some tough decisions that may cause a 
little budget pain. Americans now get it, and that is why it is time 
for some serious action. A balanced budget amendment to our 
Constitution is serious action. It would require us to consider our 
larger, collective obligation to the national economy.
  I will admit that my support of the balanced budget amendment has not 
made me particularly popular with some of my Democratic colleagues. 
Democrats traditionally have not been big fans of the balanced budget 
amendment idea. These days Democrats are suspicious that balanced 
budget proposals are a Trojan horse. They look good on the surface, but 
actually they are designed to further dismantle government programs 
that most Americans value. But a few decades ago Democrats were leading 
the charge for a reasonable balanced budget amendment.
  Most notably, Senator Paul Simon of Illinois--a progressive and 
serious-minded legislator--was perhaps the

[[Page 19784]]

greatest champion of a balanced budget, and I want to share with my 
colleagues some of his words. In debating the balanced budget amendment 
in 1993, Senator Simon said the following, which he addressed to his 
fellow progressives:

       I am here to tell you that the course we are on, unless it 
     is changed soon, absolutely threatens all of the programs 
     that you and I have fought for and believe in so strongly. 
     The fiscal folly that we followed for more than a decade has 
     brought us to a crossroads. We face a basic decision, whether 
     through default or through our actions to choose wisely the 
     course that will lead us away from the brink.
       If we do not act, interest payouts will spiral upward until 
     they consume not only Social Security but health care, 
     education, transportation investments--every need on our 
     national agenda. My warning to you today is that a rising 
     tide of red ink sinks all boats.

  That is a powerful warning from a very wise and respected colleague. 
His warning is even more serious in December of 2011 than it was in 
1993.
  There are not any easy answers here, especially since our aging 
population and the post-9/11 national security needs have squeezed our 
Nation's budget in ways we have seldom seen in our country's history. 
But it is time for us to listen to hard-working Americans who are 
telling us loudly and clearly, make the tough decisions necessary to 
get our national debt under control. So I say to my colleagues here 
today, it is time to put aside our political differences, check 
ultimatums at the door, work across the aisle, and challenge ourselves 
to put our country first.
  I want to reiterate a point I made earlier, which is that a balanced 
budget amendment is not the sole answer to the problems we face. It is 
not a perfect solution, and I recognize that. For example, it will not 
help us deal with our current debt, much less reduce it. For that we 
need a comprehensive plan along the lines of the recommendations of 
President Obama's bipartisan commission. It has been headed by former 
Clinton Chief of Staff Erskine Bowles and former Senator Al Simpson.
  Two years ago I helped create the Bowles-Simpson Commission, and I 
continue to believe its recommendations, which would lower the debt by 
more than $4 trillion over the next decade, are the best place to start 
on a path toward fiscal soundness. Let's own up to the mistakes of our 
past and take charge of the opportunity staring us in the face by 
passing the Bowles-Simpson debt reduction plan. That plan would require 
all of us to put some skin in the game, and it represents our best path 
to balance our books.
  I have also fought for bipartisan proposals to create a Presidential 
line-item veto to ban earmarks and to enforce pay-as-you-go budgeting. 
These should all be and could be and must be tools in our responsible 
budgeting toolbox. Even though we have to find the courage to get our 
current fiscal house in order, we also need to have stronger rules in 
place to ensure Congress is not tempted to fall off the wagon in the 
future. In my view, passing a balanced budget amendment to prevent us 
from ever again trading fiscal responsibility for political expediency 
is a critical step we must take.
  That long windup brings me to the balanced budget amendment proposals 
under debate in the U.S. Congress today. Let me start by saying that I 
was pleasantly surprised to see last month the U.S. House of 
Representatives pursue a balanced budget amendment that was more 
realistic than what some of my Republican colleagues here in the U.S. 
Senate have proposed. The House proposal required a balanced budget 
unless three-fifths of the House and Senate agreed there was an 
economic downturn, a national disaster, or another emergency that 
required temporary expenditures and increases thereon.
  It was a straightforward measure, and it was designed to garner a 
broad range of support. However, the House proposal fell short by 
nearly two dozen votes, largely because it did not win enough support 
from Democrats. As we know, in order for a balanced budget amendment to 
succeed, it must be bipartisan. So I was surprised to see that after 
the House balanced budget amendment failed, instead of seeking to find 
consensus with those who could bring along additional Democratic votes 
like me, my colleagues in the Senate on the other side of the aisle, 
led by my dear friend Senator Hatch, have taken an altogether different 
route.
  There are important differences between the two approaches the Senate 
will vote on this week, my amendment and Senator Hatch's amendment. So 
I want to spend some time differentiating between the two proposals 
because they represent two philosophically different ideas. We will 
have a vote on both of these proposals later this week.
  Balancing our books is a simple equation based on the principle that 
our Nation is healthier without an unreasonably large debt load. 
Members of both parties can agree on that. Yet Senator Hatch's proposal 
goes a number of steps further and seemingly seeks to shrink government 
altogether. Not only does it require an unwieldy two-thirds majority to 
waive it in case of national emergencies, it also locks in special 
interest tax breaks and could weaken Social Security, Medicare, and 
other important programs that are supported by a vast majority of 
Americans.
  Ironically, Senator Hatch's proposal--at least by some analyses--
could jeopardize our national defense as well. Why do I say that?
  I see my dear friend on the Senate floor. I look forward to engaging 
with him over the course of this important debate.
  The Republican proposal prevents government from spending more than 
18 percent of gross domestic product, which is less than the historical 
average, less than what George W. Bush spent, less than what Ronald 
Reagan spent, and less than what is required to care for our Nation's 
seniors and protect our homeland against terrorist attacks. Quite 
simply, to my way of looking at this, Senator Hatch's alternative 
proposal goes too far and has the potential to harm our middle class 
and future economic growth.
  So what am I proposing? Well, let me tell you what I think my 
proposal would do, and I would note that it is cosponsored by a number 
of my colleagues from across the country.
  My amendment would allow us to avoid the mistakes of the last decade 
without locking ourselves into a requirement that could tie our hands 
in an emergency. In such a case, if we tie our hands, we could make our 
economy worse for the middle class and small businesses and therefore 
for all of us.
  My balanced budget amendment proposes and incorporates a big dose of 
Colorado common sense. It is aimed at finding common ground that both 
parties and a big majority of Americans can support. It starts with a 
strict requirement for balancing our books. My proposal would then 
allow deficits only when three-fifths of the House and Senate vote to 
address serious economic downturns or a war or other emergencies. 
However, it would also prevent some of the worst mistakes Congress has 
made in the past 10 years. For example, it would prevent deficit-
busting tax breaks for Americans who earn $1 million or more per year. 
I think the Presiding Officer and I have a fundamental question. We 
wonder why we should continue to give tax breaks to the wealthiest 
among us during times when we are running huge deficits and aggregating 
debt like never before.
  My amendment would also create a Social Security lockbox to keep 
Congress from raiding the trust fund to hide the true size of our 
annual deficits. Right now, the Treasury Department owes close to $3 
trillion to the Social Security Administration. What I want to do is to 
see that never again is Social Security used as a slush fund to remedy 
our budgeting problems.
  In sum, my proposal upholds the principle that we should pay for our 
government in a responsible manner, with waiver authority to be used 
only in exceptional circumstances. I think most Americans could agree 
to that. Coloradans certainly do.
  I encourage all of my colleagues to acknowledge that passing a 
balanced budget amendment will require some flexibility and 
cooperation, and my

[[Page 19785]]

version is designed to do just that. It is meant to bridge the divide 
between us.
  The American people are demanding that we get our fiscal house in 
order. As usual, they are a few steps ahead of us. We have an 
opportunity to catch up to the American people. So I am here on the 
floor of the Senate today to ask my colleagues of both parties and both 
Chambers to support my proposal. As I have said, amending the 
Constitution may not be the solution desired by many in this Chamber. 
It is not something to be done without great thought. I, therefore, 
look forward to an honest and spirited dialog about the balanced budget 
amendment. I look forward to discussing the best ways to dig ourselves 
out from under our suffocating debt in a way that will encourage 
investment and job creation and help Americans and small businesses 
feel secure about their economic future. Our children's future depends 
on it.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Franken). The Senator from Utah.
  Mr. HATCH. Mr. President, I care a great deal for my colleague from 
Colorado, and I appreciate his explanation of his amendment. 
Unfortunately, as I view his amendment, it might work as long as you 
accept the rachet up of spending and taxing. That is what we are trying 
to stop around here. His S.J. Res 24 would be a band-aid on the system. 
It does not address the cause of our unbalanced budgets. An amendment 
that does not limit spending and does not limit taxes will never solve 
this crisis. It is just that simple. And to work, they have to use 
budget gimmicks.
  I wish to begin by thanking my friend, the ranking member of the 
Judiciary Committee, Senator Grassley. In his service on the committee, 
he has always been a champion of our limited government, and with his 
remarks today he has again proven himself a strong advocate of 
constitutional government. So, too, my good friend and collaborator on 
a balanced budget amendment, Senator Cornyn, deserves recognition, as 
well as my partner in the Senate, Mike Lee, and a whole raft of 
others--47, to be exact. Earlier today, Senator Cornyn highlighted 
admirably the threat our debt poses to the liberty and prosperity of 
all of America's citizens. And although he has not spoken yet, I know 
in advance that my friend and colleague from Utah, Senator Mike Lee, 
with whom I worked closely in drafting S.J. Res 10, will deliver 
powerful remarks later today in support of this amendment and about the 
importance of restoring meaningful limits on the power of the Federal 
Government.
  Today we are engaged in a historic debate. You might not know it from 
the amount of time dedicated to the subject, but I am confident that 
when the history of our country is written, today will be marked as a 
turning point.
  Today is the day that every Republican in the Senate stood up for a 
strong balanced budget amendment that will begin to restore this 
Nation's fiscal integrity. It is the day that conservatives stood up 
and supported a constitutional amendment that would reset the limit on 
the size and power of a federal government that has grown far too 
large. It is the day that the people of this country stood up for 
serious constitutional limits on Congress and the President, who have 
spent with impunity for far too long.
  We are having this debate for a simple reason: Our Nation is now $15 
trillion--actually more than $15 trillion and going up every day--in 
debt. This chart shows just how much it was just a few minutes ago. It 
is important to put this number in perspective.
  The Nation achieved the ignominious landmark of a trillion-dollar 
deficit in President Obama's first year in office. We are now in our 
third straight year of trillion-dollar deficits. The Federal Government 
is now borrowing more than 40 cents of every dollar it spends. The 
burden of this debt is more than $48,000 for every man, woman, and 
child in America.
  The Congressional Budget Office projects that interest payments alone 
on all of this debt will total $4.5 trillion, crowding out many other 
national priorities. For 2010, spending on interest on the national 
debt is greater than the funding for most other Federal programs. Let's 
look at that. As you can see, in 1 year, spending on interest on the 
national debt is greater than funding for most programs--$656.7 billion 
for the Department of Defense; $414 billion for interest expense; $173 
billion for the Department of Labor; $129 billion for the Department of 
Agriculture; $108 billion for the Department of Veterans Affairs; and 
just one other I will mention, $92.9 billion for the Department of 
Education.
  Well, the impact of this quickly escalating debt burden could prove 
catastrophic for economic growth and for American families. In a letter 
to the then-ranking member of the House Budget Committee, Paul Ryan, 
the Congressional Budget Office determined that ``beyond 2058, 
projected deficits in the alternative fiscal scenario become so large 
and unsustainable that CBO's model cannot calculate their effects.'' 
That ought to tell you something. In other words, the CBO model crashes 
when it even attempts to calculate the impact of all of this debt on 
economic growth. Yet all of these numbers might be understating the 
Nation's debt burden. What happens if interest rates rise? Right now 
they are at historic lows, but that will not always be the case, and we 
are figuring on historic lows right now as though they are going to 
continue.
  According to CBO's alternative fiscal scenario, which is our most 
realistic fiscal scenario, debt held by the public will reach 82 
percent of GDP by 2021. Now, that is if they are right, and they have 
never been right yet over the long term; they are always low. Absent 
real fiscal reforms, it will reach 100 percent of GDP by 2035. But this 
does not tell the whole bleak story. The fact is, when you include the 
IOUs the government has issued to itself, intergovernmental holdings, 
our debt is already at 100 percent of GDP--larger than our entire 
economy.
  When are our friends on the other side going to start thinking about 
these things and start realizing that they are taking us right down 
into bankruptcy in this country? This debt burden we have is simply not 
sustainable. If interest rates go back to their average in the 1990s, 
our public debt will increase by 77 percent over even these grim 
estimates I have just mentioned. We are spending at historical highs 
and going higher, and with interest on the debt taking a larger and 
larger share of spending, we need to be very concerned as a nation that 
we are entering a debt spiral from which we will have a difficult time 
extricating ourselves.
  For these reasons, ADM Mike Mullen, former Chairman of the Joint 
Chiefs of Staff, concluded that our national debt is the ``biggest 
threat we have to our national security.'' For these reasons, Standard 
& Poor's issued its historic downgrade of U.S. Treasuries this past 
summer.
  The impact of this debt is more than academic; it will eventually 
lead to higher interest rates for all Americans, undermining the 
ability of people to purchase a home, buy a car, or even start a 
business. Most importantly, it will fundamentally alter the 
relationship of citizens to their government. It will further undermine 
personal liberty. It will lead to more government control of the 
economy. And it will jeopardize the livelihoods of American business 
owners and workers as ever-escalating debt and government spending 
embolden those who seek higher taxes to finance this leviation.
  The solution to this problem is S.J. Res. 10, the balanced budget 
amendment supported by every Senate Republican, all 47 of us.
  In the time I have been fortunate enough to serve the people of Utah, 
I have sponsored 5 balanced budget amendments and have been an original 
cosponsor of 18. These amendments have not been identical. Their 
provisions have been honed over time. I am confident this version 
strikes just the right balance.
  It is the right amendment for the right time. We face a crisis of 
spending and a government that has clearly exploded in size. This 
constitutional amendment is the only one that will be

[[Page 19786]]

debated this week that will address that crisis and would reduce the 
size of this Leviathan government.
  The President has strongly opposed not only this balanced budget 
amendment but any balanced budget amendment. As he said: ``We don't 
need a constitutional amendment to do our jobs.'' My goodness. That is 
what he said on July 15 of this year.
  I wish to spend a few moments considering the President's claim. The 
President claimed that a balanced budget amendment is not necessary 
because ``the Constitution already tells us to do our jobs--and to make 
sure that the government is living within its means and making 
responsible choices.''
  The President's spokesman, Jay Carney, elaborated in greater detail 
on why a balanced budget amendment is not necessary. According to him, 
balancing the budget is ``not complicated.'' All that is needed is that 
we put politics aside, quit ducking responsibility, and roll up our 
sleeves and get to work. Yet all I hear from the White House is that we 
have to have more taxes and more spending.
  This is the lament of the tough chooser, a term coined by the 
journalist Andrew Ferguson. The tough chooser talks a lot about making 
tough choices. But when it comes to actually making them, the tough 
chooser goes missing.
  Tough choosers, concerned about our deficits and debt, voted for 
ObamaCare, even though it increased spending by $2.6 trillion and taxes 
by over $1 trillion.
  Tough choosers reject a balanced budget amendment because all that is 
required, in their view, is some tough choosing by legislators. The 
problem with this theory is that the so-called tough choosers never 
step up.
  The past history of the balanced budget amendment is all the evidence 
we need that a constitutional amendment is required to force 
legislators and the White House to make these tough choices. But given 
President Obama's rejection of the balanced budget amendment, it is 
worth considering his own actions this year and his personal 
contributions to deficit reduction. That record is a weak one of denial 
and avoidance.
  Following the clear statement of the American people last November 
that Washington needed to address deficits and debt, the President had 
an opportunity to lead with his fiscal year 2012 budget. Yet this is 
how the Washington Post described the impact of that budget. After next 
year, ``the deficit will begin to fall, settling around $600 billion a 
year through 2018, when it would once again begin to climb as a growing 
number of retirees tapped into Social Security and Medicare.''
  So the President, who today is telling us that he and Congress are 
willing to buckle down and make tough choices to balance the Nation's 
books, gave us a budget that did little to put this country on a path 
toward long-term fiscal sustainability.
  The President's budget landed with such a thud and was so 
unresponsive to the desire of the American people to tackle the debt, 
that he took a mulligan and attempted a budget do-over in the Spring. 
In an April 13 speech at George Washington University, President Obama 
offered a revised budget. True to form, he did not stick his neck out 
and actually offer anything that could be scored by the CBO. Yet 
Republicans did analyze the President's speech, and after stripping out 
the gimmicks and the rosy scenarios, they found that far from making 
any tough choices, his do-over actually added $2.2 trillion to the 
deficit.
  This avoidance of tough choosing by Washington's tough choosers is, 
unfortunately, the norm.
  We have heard the President's argument before. I have heard it now 
for 35 years, maybe not just from him but from others as well. We hear 
it every time a balanced budget amendment comes to the floor and is 
debated in the Senate. The opponents claim there is no need for a 
balanced budget amendment; all that is necessary is that we put 
politics aside and make the tough choices.
  So how is that working out for our country?
  When I introduced my first balanced budget amendment in 1979, the 
national debt was $827 billion. We thought that was astronomical. In 
1982, when the Senate passed a balanced budget amendment that I 
cosponsored, the national debt had risen to $1.1 trillion. In 1986, 
when the Senate failed by one vote to pass a balanced budget amendment 
that I cosponsored, the national debt topped $2.1 trillion. By 1997, 
when this body voted on a balanced budget amendment that I introduced, 
the national debt had passed the $5 trillion mark. Today, it is three 
times that amount--over $15 trillion.
  The record is clear. Absent the constitutional restraint of a 
balanced budget amendment, Congress and the President do not make the 
tough choices. Instead, they take the path of least resistance. They 
gladly disperse Federal dollars today--to grateful special interests--
and then figure out a way to pay for it tomorrow, except they never 
figure out the way.
  This is not the political and economic philosophy of the Founders, 
who warned at the birth of our Republic against debt and overspending. 
That is the political philosophy of J. Wellington Wimpy, who would 
``gladly pay you Tuesday for a hamburger today.''
  A balanced budget amendment is not an abdication of Congress's 
responsibility. On the contrary, it would force Congress to live up to 
its responsibilities. It would force Congress and the President to make 
the choices about national spending priorities they have thus far been 
unwilling to make.
  I don't think there are many Americans who question whether our 
fiscal situation would be better today if we had enacted and the States 
had ratified a constitutional amendment when Ronald Reagan was 
President.
  This is where we are headed as a country if we don't get our fiscal 
house in order. We are headed off a cliff. I could have put up a map of 
Greece, but that might have understated our predicament.
  Yet to hear the opponents of a balanced budget amendment talk, one 
would think the problem we face as a country is the amendment, not the 
out-of-control spending that demands such an amendment.
  These misplaced priorities fundamentally understate how much 
government spending is accelerating in this country and the threat this 
spending poses for personal liberty, constitutionally limited 
government, and free enterprise.
  As I noted earlier, our true debt burden is already 100 percent of 
GDP. This is very dangerous territory. According to the economists 
Carmen Reinhart and Kenneth Rogoff, public debt burdens above 90 
percent of GDP are associated with 1-percent lower economic growth.
  I ask unanimous consent that a short article outlining their thesis 
be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                  [From Bloomberg.com, July 14, 2011]

    Too Much Debt Means the Economy Can't Grow: Reinhart and Rogoff

             (By Carmen M. Reinhart and Kenneth S. Rogoff)

       As public debt in advanced countries reaches levels not 
     seen since the end of World War II, there is considerable 
     debate about the urgency of taming deficits with the aim of 
     stabilizing and ultimately reducing debt as a percentage of 
     gross domestic product.
       Our empirical research on the history of financial crises 
     and the relationship between growth and public liabilities 
     supports the view that current debt trajectories are a risk 
     to long-term growth and stability, with many advanced 
     economies already reaching or exceeding the important marker 
     of 90 percent of GDP. Nevertheless, many prominent public 
     intellectuals continue to argue that debt phobia is wildly 
     overblown. Countries such as the U.S., Japan and the U.K. 
     aren't like Greece, nor does the market treat them as such.
       Indeed, there is a growing perception that today's low 
     interest rates for the debt of advanced economies offer a 
     compelling reason to begin another round of massive fiscal 
     stimulus. If Asian nations are spinning off huge excess 
     savings partly as a byproduct of measures that effectively 
     force low-income savers to put their money in bank accounts 
     with low government-imposed interest-rate ceilings--why not 
     take advantage of the cheap money?

[[Page 19787]]

       Although we agree that governments must exercise caution in 
     gradually reducing crisis-response spending, we think it 
     would be folly to take comfort in today's low borrowing 
     costs, much less to interpret them as an ``all clear'' signal 
     for a further explosion of debt.
       Several studies of financial crises show that interest 
     rates seldom indicate problems long in advance. In fact, we 
     should probably be particularly concerned today because a 
     growing share of advanced country debt is held by official 
     creditors whose current willingness to forego short-term 
     returns doesn't guarantee there will be a captive audience 
     for debt in perpetuity.
       Those who would point to low servicing costs should 
     remember that market interest rates can change like the 
     weather. Debt levels, by contrast, can't be brought down 
     quickly. Even though politicians everywhere like to argue 
     that their country will expand its way out of debt, our 
     historical research suggests that growth alone is rarely 
     enough to achieve that with the debt levels we are 
     experiencing today.
       While we expect to see more than one member of the 
     Organization for Economic Cooperation and Development default 
     or restructure their debt before the European crisis is 
     resolved, that isn't the greatest threat to most advanced 
     economies. The biggest risk is that debt will accumulate 
     until the overhang weighs on growth.


                         Historical Precedents

       At what point does indebtedness become a problem? In our 
     study ``Growth in a Time of Debt,'' we found relatively 
     little association between public liabilities and growth for 
     debt levels of less than 90 percent of GDP. But burdens above 
     90 percent are associated with 1 percent lower median growth. 
     Our results are based on a data set of public debt covering 
     44 countries for up to 200 years. The annual data set 
     incorporates more than 3,700 observations spanning a wide 
     range of political and historical circumstances, legal 
     structures and monetary regimes.
       We aren't suggesting there is a bright red line at 90 
     percent; our results don't imply that 89 percent is a safe 
     debt level, or that 91 percent is necessarily catastrophic. 
     Anyone familiar with doing empirical research understands 
     that vulnerability to crises and anemic growth seldom depends 
     on a single factor such as public debt. However, our study of 
     crises shows that public obligations are often hidden and 
     significantly larger than official figures suggest.


                      Creative Accounting Devices

       In addition, off-balance sheet guarantees and other 
     creative accounting devices make it even harder to assess the 
     true nature of a country's debt until a crisis forces 
     everything out into the open. (Just think of the giant U.S. 
     mortgage lenders Fannie Mae and Freddie Mac, whose debt was 
     never officially guaranteed before the 2008 meltdown.)
       There also is the question of how broad a measure of public 
     debt to use. Our empirical work concentrates on central-
     government obligations because state and local data are so 
     limited across time and countries, and government guarantees, 
     as noted, are difficult to quantify over time. (Until we 
     developed our data set, no long-dated cross-country 
     information on central government debt existed.) But state 
     and local debt are important because they so frequently 
     trigger federal government bailouts in a crisis. Official 
     figures for state debts don't include chronic late payments 
     (arrears), which are substantial in Illinois and California, 
     for example.


                        Public and Private Debt

       Indeed, it isn't unusual for governments to absorb large 
     chunks of troubled private debt in a crisis. Taking this into 
     account, chart 1, attached, shows the extraordinarily high 
     level of overall U.S. debts, public and private.
       In addition to ex-ante or ex-post government guarantees and 
     other forms of ``hidden debts,'' any discussion of public 
     liabilities should take into account the demographic 
     challenges across the industrialized world. Our 90 percent 
     threshold is largely based on earlier periods when old-age 
     pensions and health-care costs hadn't grown to anything near 
     the size they are today. Surely this makes the burden of debt 
     greater.
       There is a growing sense that inflation is the endgame to 
     debt buildups. For emerging markets that has often been the 
     case, but for advanced economies, the historical correlation 
     is weaker. Part of the reason for this apparent paradox may 
     be that, especially after World War II, many governments 
     enacted policies that amounted to heavy financial repression, 
     including interest-rate ceilings and non-market debt 
     placement. Low statutory interest rates allowed governments 
     to reduce real debt burdens through moderate inflation over a 
     sustained period. Of course, this time could be different, 
     and we shouldn't entirely dismiss the possibility of elevated 
     inflation as the antidote to debt.


                             Extremely Rare

       Those who remain unconvinced that rising debt levels pose a 
     risk to growth should ask themselves why, historically, 
     levels of debt of more than 90 percent of GDP are relatively 
     rare and those exceeding 120 percent are extremely rare (see 
     attached chart 2 for U.S. public debt since 1790). Is it 
     because generations of politicians failed to realize that 
     they could have kept spending without risk? Or, more likely, 
     is it because at some point, even advanced economies hit a 
     ceiling where the pressure of rising borrowing costs forces 
     policy makers to increase tax rates and cut government 
     spending, sometimes precipitously, and sometimes in 
     conjunction with inflation and financial repression (which is 
     also a tax)?
       Even absent high interest rates, as Japan highlights, debt 
     overhangs are a hindrance to growth.
       The relationship between growth, inflation and debt, no 
     doubt, merits further study; it is a question that cannot be 
     settled with mere rhetoric, no matter how superficially 
     convincing.
       In the meantime, historical experience and early 
     examination of new data suggest the need to be cautious about 
     surrendering to ``this-time-is-different'' syndrome and 
     decreeing that surging government debt isn't as significant a 
     problem in the present as it was in the past.
  Mr. HATCH. Mr. President, while one might quibble with the 
particulars of Reinhart's and Rogoff's assessment, failure to take it 
seriously, given the recent struggles of the eurozone, amounts to 
whistling past the graveyard.
  To be clear, the long-term source of our fiscal problem is 
overspending, not a lack of revenue. Our friends at the Heritage 
Foundation have done an excellent job of putting all this spending into 
historical perspective.
  I will run through some charts highlighting just how unusual and 
unsustainable recent levels of Federal spending have become. Any way we 
cut it, spending is up. Federal spending per household is skyrocketing, 
even with the $2.1 trillion in deficit reduction achieved by this 
summer's Budget Control Act.
  In 1965, Federal spending per household was $11,431. In 2010, it was 
$29,401. It is projected to hit $35,773 in 2020. That is per household.
  Federal spending is growing faster than median income. Between 1970 
and 2009, total Federal spending rose by 299 percent, while median 
household income has gone up 27 percent in the same time period.
  Federal spending that is far out of line with historical averages is 
the cause of our annual deficits and total debt--not the much reviled 
2001 and 2003 tax relief extended by President Obama and a Democratic 
Congress.
  Historically, revenues have averaged around 18 percent of GDP. As the 
economy recovers, CBO projects revenues to return to that historical 
average. Yet spending is going higher and higher.
  The end result of all this spending is not pretty to look at. Our 
national debt is going to skyrocket. Up to 344 percent by 2050.
  The problem the Senate Republican balanced budget amendment is meant 
to address is reckless spending. We will hear many arguments against 
this amendment. We will hear it prevents tax increases. We will hear it 
prevents deficit spending in an economic downturn. We will hear it 
hamstrings the Nation in times of military emergency and that it 
prevents spending in excess of 18 percent of GDP.
  It does no such thing. What it does do is require a broad national 
consensus before Congress spends beyond its means. It makes certain 
that there is deep bipartisan agreement before raising taxes--a 
provision the Nation would have benefited from prior to the decision of 
the President and congressional Democrats to drive through $1 trillion 
in ObamaCare tax increases on nearly party-line votes, and it demands 
wide support for spending in excess of 18 percent of GDP.
  As my friends at Americans for Prosperity put it in their letter of 
support for the Republican proposal, the amendment ``strikes a balance 
between allowing flexibility for some deficit spending in times of 
national emergency, while requiring supermajorities in both Chambers to 
do so. This assures citizens that the Federal Government will only run 
a deficit when there is broad consensus that a genuine crisis demands 
it.''
  That sounds like pretty good language to me.
  I ask unanimous consent that that letter from Americans for 
Prosperity be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                     Americans for Prosperity,

                                                   March 31, 2011.
       Dear Senator Hatch and Cosponsors: On behalf of more than 
     1.7 million Americans

[[Page 19788]]

     for Prosperity (AFP) activists in all 50 states, I applaud 
     you for proposing a balanced budget amendment to the United 
     States Constitution that includes a strong limit on total 
     federal spending. Over the past decade or so, it has become 
     increasingly clear that unless there are firm constitutional 
     guardrails to constrain federal spending elected officials 
     are either unable or unwilling to overcome the institutional 
     forces that facilitate endless profligacy. Your proposed 
     amendment seeks to establish those guardrails in a 
     responsible and, hopefully, effective way.
       One of the most important provisions in your proposed 
     amendment is a spending cap that would limit federal outlays 
     to 18 percent of GDP. This limitation reflects a proper 
     vision of limited government and the relationship of spending 
     to GDP in the post-WWII period. Additionally, by insisting 
     that spending is restrained in order to balance the budget 
     you guard against the amendment being hijacked and distorted 
     to advance economically-destructive tax increases.
       Your amendment also strikes a balance between allowing 
     flexibility for some deficit spending in times of national 
     emergency, while requiring supermajorities in both chambers 
     to do so. This assures citizens that the federal government 
     will only run a deficit when there is a broad consensus that 
     a genuine crisis demands it.
       Several other provisions nicely round out your balanced 
     budget amendment. Your insistence on two-thirds majority vote 
     to approve tax increases or spending above 18 percent of GDP 
     is laudable. Your measure to prohibit courts from legislating 
     tax increases from the bench is important and prescient. 
     Finally, a five-year transitionary period from ratification 
     to legal efficacy will give budgeteers enough notice to take 
     meaningful action without the politically-contentious 
     transition that could otherwise be used as a pretext to 
     oppose the amendment.
       While it is always difficult to predict how the Judicial 
     Branch will interpret any portion of the Constitution, the 
     mere presence of a balanced budget amendment will serve to 
     compel the tough decision making that is often skirted in 
     today's federal budget process. It's time for the federal 
     government to balance its books, and AFP is proud to support 
     your amendment. I urge your colleagues to support its passage 
     and I look forward to working with you in the future.
           Sincerely,
                                                      James Valvo,
                                   Director of Government Affairs.

  Mr. HATCH. Mr. President, we will hear there is a reasonable 
alternative being offered. But we need to understand this for what it 
is. It doesn't put any spending limitations on Congress. It leaves wide 
the door for massive tax increases to pay for levels of spending that 
are far outside our constitutional traditions. Even the requirement for 
balance--that outlays not exceed revenues--lacks strength, if we read 
it carefully.
  The bottom line is that there is no substitute for the strong 
balanced budget amendment being offered by the Senate Republicans.
  A number of protaxpayer groups committed to liberty and 
constitutionalism have written in support of our balanced budget 
amendment--Let Freedom Ring, Americans for Tax Reform, the National 
Taxpayers Union, the 60 Plus Association, Americans for Limited 
Government, and the Council for Citizens Against Government Waste, just 
to mention a few.
  I ask unanimous consent that their letters be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                   March 30, 2011.
     Hon. Jon Kyl,
     Hart Senate Office Building,
     Washington, DC.
     Hon. Orrin Hatch,
     Hart Senate Office Building,
     Washington, DC.
     Hon. Pat Toomey,
     Dirksen Senate Office Building,
     Washington, DC.
     Hon. Mike Lee,
     Hart Senate Office Building,
     Washington, DC.
     Hon. John Cornyn,
     Hart Senate Office Building,
     Washington, DC.
       Dear Senators: We write to encourage your colleagues to 
     support your Balanced Budget Amendment to the United States 
     Constitution, signaling the United States Senate is serious 
     about reforming federal government spending.
       The amendment limits spending to 18 percent of Gross 
     Domestic Product (GDP). Capping spending at this level puts 
     spending in line with the historical average of revenue 
     receipts. Since 1970, spending has averaged 21 percent of GDP 
     while tax revenues have consistently stayed around 18 
     percent. However, CBO projects spending will explode over the 
     next decade, averaging over 23 percent of GDP. Capping 
     spending at 18 percent demonstrates that the government 
     should be cognizant of its means--and live prudently within 
     them.
       Most importantly, your Balanced Budget Amendment places the 
     onus of responsible budgeting on lawmakers, rather than 
     passing the burden onto taxpayers who are already shouldering 
     the weight of failed ``stimulus'' programs and bailouts. It 
     does this by requiring any net tax increases to overcome a 
     two-thirds supermajority in each chamber of Congress.
       This clause is vital to keep the debate where it should 
     be--federal overspending. Americans are not taxed too little; 
     Washington spends too much. In the same vein, the spending 
     restraint in the amendment cannot be waived unless a two-
     thirds majority agrees to do so.
       While the bill could be strengthened to require a 
     supermajority to waive the spending cap during a declared 
     war, it does require a vote of three-fifths of the Congress 
     to approve spending beyond the cap in the times of a military 
     conflict. What's more, the amendment requires a three-fifths 
     vote to raise the debt limit, forcing Congress to confront 
     its poor spending habits rather than simply increasing its 
     borrowing authority.
       Thus, we support the Balanced Budget Amendment and 
     encourage your colleagues to cosponsor the measure to signal 
     lawmakers are serious about fiscal restraint.
           Sincerely,
     Grover Norquist,
       President, Americans for Tax Reform.
     Mattie Corrao,
       Executive Director, Center for Fiscal Accountability.
                                  ____



                                     National Taxpayers Union,

                                                   March 31, 2011.

   An Open Letter to the United States Senate: Support the Consensus 
                       Balanced Budget Amendment!

       Dear Senator: On behalf of the 362,000 member National 
     Taxpayers Union (NTU), I write to provide our strong 
     endorsement of the ``Consensus Balanced Budget Amendment'' 
     (BBA), which is the product of negotiations among advocates 
     of several BBA measures. We commend Senator Hatch and his 
     colleagues, Senators Lee, Cornyn, Kyl, McConnell, Toomey, 
     Snowe, Risch, Rubio, DeMint, Paul, Vitter, Enzi, Kirk, and 
     Crapo, for introducing this legislation and urge all Senators 
     to cosponsor the resolution.
       NTU has approached the current legislative evolution of the 
     BBA not merely as an interested observer or even as a 
     concerned stakeholder. Instead, we view this process through 
     a 40-plus-year organizational history in which constitutional 
     limits on the size of government have occupied the central 
     part of our mission.
       Throughout the 1970s and 1980s, my organization helped to 
     launch and sustain the movement for a limited Article V 
     amendment convention among the states to propose a Balanced 
     Budget Amendment (BBA) for ratification, all while pursuing a 
     BBA through Congress. Our members were elated over the 
     passage of S.J. Res. 58 in 1982, and the passage of H.J. Res. 
     1 in 1995 through the House of Representatives. In both cases 
     the measures, whose provisions varied somewhat, fell short of 
     enactment in the other chambers of Congress. More recently, 
     we have provided endorsements to BBA legislation such as S.J. 
     Res. 3 and H.J. Res. 1.
       To our members, a BBA would provide the very lifeblood that 
     will restore and sustain the financial health of our 
     Republic. We are therefore elated over the intensifying 
     interest among Members of Congress and state legislators in a 
     unified BBA concept. The proposal admirably harnesses this 
     energy, by combining and refining elements from several 
     amendments introduced thus far in Congress. These include 
     strong ``supermajority'' safeguards against reckless tax or 
     debt increases as well as override provisions to confront the 
     realities of military conflicts.
       Also of great importance is the amendment's spending 
     limitation clause. Although several types of mechanisms could 
     answer to the purpose of controlling growth in expenditures, 
     any such protection incorporating Gross Domestic Product 
     (GDP) must pay careful heed to historical experience. In this 
     case, an annual spending cap at 18 percent of GDP is clearly 
     the most prudent choice. Such a level reflects the share of 
     economic output that federal revenues have typically 
     represented since World War II. Given that constitutional 
     amendments should be designed with a long nod to the past and 
     an equally farsighted view to the future, 18 percent is a 
     most stable and logical benchmark.
       In addition, setting the expenditure limit at 18 percent 
     would make a vital contribution toward harmonizing all parts 
     of the amendment so that the whole functions as intended. An 
     assumption that spending should normally be linked to the 
     average and customary federal revenue proportion would by its 
     very nature give Congress and the President a starting point 
     that is closer to balance. Indeed, the limit helps to remedy 
     Washington's increasingly metastasized affliction of tax-
     spend-and-borrow, by elevating the concept of expenditure 
     restraint to its rightful place in policymaking. While the 
     two-thirds ``supermajority'' override requirement is 
     essential to ensuring this place,

[[Page 19789]]

     so is the 18 percent cap on expenditures. If set too high, 
     the spending limit would merely institutionalize, rather than 
     minimize, deficits. Recent spending-to-GDP ratios in excess 
     of 20 percent--and the resulting pressures to borrow or tax 
     even more--ought to convince fiscal disciplinarians of the 
     need for a carefully-designed limit.
       We understand the political environment within which the 
     consensus BBA was crafted, and, given our history, we 
     appreciate the many challenges in the legislative effort that 
     lies ahead. Yet it is precisely our longstanding devotion to 
     this reform that gives us cause to make several observations. 
     Moving forward, Senators must commit to passage of the BBA in 
     this Congress, not simply another ``test vote'' tied to some 
     legislative urgency. This means making the Amendment a part 
     of the Congress's everyday narrative on tax and spending 
     policy, thereby leading a national discussion that occupies a 
     primary place in the public square. Nor should the BBA be 
     held as some proxy to other reform approaches. Indeed, 
     statutory or regulatory steps to control the nation's 
     finances are not ``second-best'' substitutes; their very 
     effectiveness depends upon a constitutional foundation that 
     will set the boundaries within which they can operate.
       Furthermore, supporters of this BBA must reach far and wide 
     across the aisle to obtain the necessary bipartisan backing 
     that will ensure passage of the measure. The temptation to 
     put electoral calculations first is unacceptable to 
     taxpayers, who (properly) surmise that concerted action to 
     control deficits cannot wait until after 2012. Likewise, 
     Senators must engage their House colleagues as well as state 
     legislators in their capitols back home, many of whom have 
     both the commitment and the experience to see the BBA through 
     to passage and ratification.
       Through all of these means, and toward the critical end of 
     enacting a Balanced Budget Amendment, NTU and members pledge 
     the fullest possible measure of their time, energy, and 
     resources. Together, we can fulfill this long-overdue 
     obligation to future generations.
           Sincerely,
                                                        Pete Sepp,
     Executive Vice President.
                                  ____



                                      The 60 Plus Association,

                                   Alexandria, VA, March 31, 2011.
       Dear Senator Hatch: On behalf of more than seven million 
     senior citizen activists, the 60 Plus Association thanks you 
     for introducing the joint resolution proposing an amendment 
     to the Constitution of the United States relative to 
     balancing the budget.
       Thanks to your outstanding leadership, this effort shows a 
     solid commitment to restore the fiscal stability of the 
     United States by balancing the nation's budget.
       We applaud your efforts to respond to the overwhelming 
     concern Americans have to the spiraling debt and out-of-
     control spending and cannot stress strongly enough that 
     senior citizens and soon-to-be-seniors believe that current 
     budget policy cripples our economic stability and threatens 
     our nation's future.
           Sincerely,
                                                  James L. Martin,
     Chairman.
                                  ____

                                                     Americans for


                                           Limited Government,

                                      Fairfax, VA, March 31, 2011.
     Senate Minority Leader Mitch McConnell,
     361-A Russell Senate Office Building, Washington, DC.
     Senator Orrin Hatch,
     104 Hart Office Building, Washington, DC.
       Dear Leader McConnell and Senator Hatch: As you are well 
     aware, the nation is risking a fiscal calamity that threatens 
     a catastrophic default on the $14.2 trillion national debt 
     and the collapse of the dollar as the world's reserve 
     currency. If something is not done to bring the nation's 
     fiscal house into order, soon the debt will become too large 
     to even refinance, let alone be repaid.
       That is why Americans for Limited Government strongly 
     endorses the Senate Republican Balanced Budget Amendment and 
     urges all members of the Senate to fight for its immediate 
     adoption. Soon the gross national debt will become larger 
     than the entire economy, and by 2021, the Office of 
     Management and Budget projects it will soar to over $25 
     trillion.
       Interest payments alone threaten to destabilize the 
     nation's finances very soon. In 2010, the Treasury paid a 
     total of $413 billion in interest, including $216 billion to 
     the Social Security and Medicare trust funds. The total 
     interest is a real obligation that requires real borrowing to 
     meet, and cannot be readily discounted as revenue to the 
     entitlement programs when it is in fact a liability to 
     taxpayers.
       The total interest owed on the debt will actually be over 
     $1.2 trillion in 2021. And since the government never 
     anticipates the debt being paid down, the number will easily 
     grow to over $2.4 trillion by 2030. Moody's has warned that 
     when interest owed on the debt reaches 18 to 20 percent of 
     revenue, the nation's gold-plated Triple-A credit rating will 
     be downgraded. The trouble is that the Office of Management 
     and Budget projects total interest owed for 2011 to be $430.4 
     billion, which is already 19.79 percent of the projected 
     $2.174 trillion of revenue. That means time has already run 
     out.
       Currently, the $14.2 trillion national debt already stands 
     at 95.5 percent of the nation's $14.8 trillion Gross Domestic 
     Product (GDP). While it is unclear at what percentage of 
     debt-to-GDP that the debt will become too large to refinance, 
     the warning signs are already there that we cannot even meet 
     our current obligations honestly.
       Pimco reports that in 2009, 80 percent of treasuries were 
     purchased by the Federal Reserves, and in 2010, it had to buy 
     70 percent, bringing its current U.S. debt holdings to $1.3 
     trillion. As a result, the Fed is the largest lender to the 
     U.S. government in the world--all with printed money--more 
     than China or Japan. When the Fed ends QE2 in June, it will 
     likely keep a high water mark of $1.5 trillion in treasuries 
     holdings.
       Printing money to refinance the debt cannot continue for 
     long without very severe consequences, including a potential 
     collapse of the dollar as the world's reserve currency, 
     hyperinflation, and a complete default on the nation's 
     obligations. The time to pass the Balanced Budget Amendment 
     is now, before it is too late and it becomes impossible for 
     the debt to ever be repaid.
       The Balanced Budget Amendment being proposed, once 
     implemented, will make it possible that for the first time 
     since 1957, the national debt can be reduced. This must begin 
     to occur to reassure the nation's creditors that the U.S. 
     intends to honor its obligations with real money, not with a 
     ``pretended payment'' that economist Adam Smith warned 
     against.
       With the upcoming vote on increasing the national debt 
     ceiling above $14.294 trillion, now is the opportunity to use 
     your leverage not just to get an up-or-down vote on the 
     Balanced Budget Amendment, but to get it adopted. To do so, 
     we urge you to take your case directly to the American 
     people, who will join with you in fighting to make certain 
     that another increase in the debt will never again be 
     necessary.
       The American people must be advised of these cataclysmic 
     risks of inaction. There is a very dangerous misconception 
     that the nation can just continue borrowing and printing 
     money perpetually. It cannot. Nor will it long endure as the 
     world's foremost economic and military superpower if it tries 
     to.
       Besides a failure to meet our fiscal obligations, a 
     national default will mean that the U.S. will be unable to 
     meet its security obligations around the world, destabilizing 
     whole regions, and threatening national security. It is 
     likely for this reason that Chairman of the Joint Chiefs of 
     Staff, Admiral Mike Mullen, described the debt as the number 
     one danger facing America.
       With a projected $1.645 trillion budget deficit for this 
     year alone, the hour grows late for real action to rein in 
     the federal government's unsustainable spending binge. It is 
     clear that Congress lacks the political will to do what is 
     necessary on its own. It needs the constitutional limits on 
     spending, taxation, and the balanced budget requirement 
     outlined in your amendment to compel it to act prudently when 
     handling the American people's finances.
       We thank you for your work on this critical issue, and urge 
     you to use all the tools at your disposal, including the 
     leverage of increasing the national debt ceiling, to ensure 
     speedy adoption of the Balanced Budget Amendment. If you will 
     take a courageous stand to save this nation from certain 
     ruin, the American people will surely stand with you.
           Sincerely,
                                                   William Wilson,
     President.
                                  ____

                                              Council for Citizens


                                     Against Government Waste,

                                   Washington, DC, March 31, 2011.
     U.S. Senate,
     Washington, DC.
       Dear Senator, Senator Orrin Hatch (R-Utah) will soon 
     introduce an amendment to the Constitution requiring that the 
     federal budget be balanced. This amendment has received wide 
     support, including that of Senators Mitch McConnell (R-Ky.), 
     Mike Lee (R-Utah), John Cornyn (R-Tex.), Jon Kyl (R-Ariz.), 
     Pat Toomey (R-Pa.), John Thune (R-S.D.) and Marco Rubio (R-
     Fla.). On behalf of the more than one million members and 
     supporters of the Council for Citizens Against Government 
     Waste (CCAGW), I urge you to support this legislation.
       Federal spending has ballooned out of control. Taxpayers 
     are bracing themselves as the nation rapidly approaches its 
     statutory, record-breaking $14.3 trillion debt limit. 
     According to the Congressional Budget Office, recession-
     depleted tax revenues are scheduled to rebound to their 
     historical average of 18 percent of gross domestic product 
     (GDP) by 2018 and reach 18.4 percent by 2021. Federal 
     spending, which has historically been 20.3 percent of GDP, 
     however, is projected to reach 26.4 percent of GDP by 2021. 
     America is on a dangerous trajectory as Congress continues to 
     increase spending and raise debt

[[Page 19790]]

     ceilings without regard to incoming levels of revenue. 
     Washington has put taxpayers at risk by violating a Budgeting 
     101 rule of thumb: Don't spend more money than you take in.
       This proposed constitutional amendment would ensure that 
     total outlays will not be allowed to exceed 18 percent of the 
     U.S. GDP of a fiscal year and will require the president to 
     submit a balanced budget to Congress that reflects the 18 
     percent cap. A two-thirds majority vote would be required of 
     both the House and Senate to override the spending cap, 
     increase taxes or levy a new tax. Additionally, a three-
     fifths majority vote in both Houses would be needed to 
     increase the debt limit. In times of declared war, a simple 
     majority vote will be necessary for a specific excess amount 
     above the 18 percent cap, and in times of military conflict a 
     three-fifths majority will be required. In order to protect 
     taxpayers, the amendment prohibits courts from raising 
     revenue as a means of enforcement.
       The federal government has a moral and fiscal 
     responsibility to Americans that it has simply been shirking. 
     Congress cannot continue on a spending rampage while ignoring 
     the nation's balance sheets. This legislation proposes a 
     practical and necessary constitutional amendment that will 
     safeguard taxpayers and force Congress to balance the 
     national budget. All votes on the Balanced Budget Amendment 
     will be among those considered in CCAGW's 2011 Congressional 
     Ratings.
           Sincerely,
                                                 Thomas A. Schatz,
                                                        President.

  Mr. HATCH. Mr. President, I am so pleased conservative leaders such 
as Ed Meese, Dick Thornburgh, and Ken Blackwell have stood in support 
of a strong balanced budget amendment.
  I ask unanimous consent to have printed in the Record at this point 
the op-eds to which I just referred.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                  [From Bloomberg.com, July 20, 2011]

              Deficits Need Balanced-Budget Amendment Fix

                          (By Dick Thornburgh)

       A late entrant in the budget deficit-debt ceiling talkathon 
     in Washington is increasing support for a constitutional 
     requirement that the federal budget be balanced every year. 
     Liberals will no doubt characterize this proposal as a nutty 
     one, but careful scrutiny of such an amendment to our 
     constitution demonstrates its potential to prevent future 
     train wrecks in the budgeting process.
       Constitutional budget-balancing requirements are already 
     available to most governors and state legislatures, along 
     with a line-item veto and separate capital budgeting, which 
     differentiates investments from current outlays. They work.
       Any debate in Congress will probably include the following 
     arguments against a balanced-budget amendment:
       First, that the amendment would clutter our basic document 
     in a way contrary to the intention of the Founding Fathers. 
     This is clearly wrong. The framers of the Constitution 
     contemplated that amendments would be necessary to keep it 
     abreast of the times. It has, in fact, been amended 27 times.
       Moreover, at the time of the Constitutional Convention, one 
     of the major preoccupations was how to liquidate the post- 
     Revolutionary War debts of the states. It would have been 
     unthinkable to the framers that the federal government would 
     systematically run a deficit, decade after decade. The 
     Treasury didn't begin to follow such a practice until the 
     mid-1930s.
       Second, critics will argue that the adoption of a balanced-
     budget amendment wouldn't solve the deficit problem 
     overnight. This is absolutely correct, but begs the issue. 
     Serious supporters of the amendment recognize that a phasing-
     in of five to 10 years would be required.
       During this interim period, however, budget makers would 
     have to meet declining deficit targets in order to reach a 
     final balanced budget by the established deadline.
       As pointed out by former Commerce Secretary Peter G. 
     Peterson, such ``steady progress toward eliminating the 
     deficit will maintain investor confidence, keep long-term 
     interest rates headed down and keep our economy growing.''
       Third, it will be argued that such an amendment would 
     require vast cuts in social services, entitlements and 
     defense spending. Not necessarily. True, these programs would 
     have to be paid for on a current basis rather than heaped on 
     the backs of future generations. Difficult choices would have 
     to be made about priorities and program funding. But the very 
     purpose of the amendment is to discipline the executive and 
     legislative branches, not to propose or perpetuate vast 
     spending programs without providing the revenue to fund them.
       The amendment would, in effect, make the president and 
     Congress fully accountable for their spending and taxing 
     decisions.
       Fourth, critics will say that a balanced-budget amendment 
     would prevent or hinder our capacity to respond to national 
     defense or economic emergencies. This concern is easy to 
     counter. Clearly, any sensible amendment proposal would 
     feature a safety valve to exempt deficits incurred in 
     response to emergencies, requiring, for example, a three-
     fifths majority in both houses of Congress. Such action 
     should, of course, be based on a finding that such an 
     emergency actually exists.
       Fifth, it will be said that a balanced-budget amendment 
     might be easily circumvented. The experience of the states 
     suggests otherwise. Balanced-budget requirements are now in 
     effect in all but one (Vermont) of the 50 states and have 
     served them well.
       Moreover, the line-item veto, available to 43 governors, 
     would ensure that congressional overruns--or loophole end 
     runs--could be rejected by the president. The public's 
     opposition, the elective process and the courts would also 
     restrain any tendency to ignore a constitutional directive.
       In the final analysis, most of the excuses for not enacting 
     a constitutional mandate to balance the budget rest on a 
     stated or implied preference for solving our deficit dilemma 
     through the political process--that is to say, through 
     responsible action by the president and Congress.
       But that has been tried and found wanting, again and again.
       Surely the U.S. is ready for a simple, clear and supreme 
     directive that compels elected officials to fulfill their 
     fiscal responsibilities. A constitutional amendment is the 
     only instrument that will meet this need. Years of experience 
     at the state level argue in favor of such a step. Years of 
     debate have produced no persuasive arguments against it.
       The stakes are high. Perhaps Thomas Jefferson put it best: 
     ``To preserve our independence, we must not let our rulers 
     load us down with perpetual debt.''
       That is the aim of a balanced-budget amendment. Reform-
     minded members of Congress should support such an amendment 
     to our Constitution as a means of resolving future 
     legislative crises and ending credit-card government once and 
     for all.
       A nutty idea? Not by a long shot.
                                  ____


                 [From the Patriot Post, Apr. 5, 2011]

      Hatch and Lee's Balanced Budget Amendment: A Win for America

                           (By Ken Blackwell)

       Senators Orrin Hatch and Mike Lee introduced a Balanced 
     Budget Amendment (BBA) to make it a constitutional 
     requirement for Washington, D.C., to end our deficit spending 
     and culture of debt. And our national grassroots 
     organization, Pass the Balanced Budget Amendment, is working 
     with them to compel lawmakers to approve this change to the 
     Supreme Law of the Land.
       The BBA requires that the U.S. cannot spend more than it 
     takes in. There are a few exceptions, such as allowing two-
     thirds of the House and Senate to suspend it for a specific 
     reason for one year, with lower thresholds to respond to a 
     military threat to our national security or an official, 
     declared war against a specific nation (not some open-ended 
     or global military operation).
       The amendment is cosponsored by all 47 Senate Republicans. 
     This raises eyebrows in that the last time a proposed BBA was 
     voted on, 1997, it enjoyed Democratic support with 66 votes, 
     falling a single vote short in the Senate.
       A separate story here is Utah's leading role. That state's 
     senior senator, Orrin Hatch, designed one version of the BBA. 
     Utah's junior senator, Mike Lee, designed another. Both 
     senators--one tied as the most senior Republican in the 
     chamber and the other among the newest--then designed a 
     composite version.
       The resulting BBA addresses several major economic 
     priorities. In addition to forcing a balanced budget, the BBA 
     caps federal spending at 18 percent of GDP. It also requires 
     a 60-percent vote to raise the national debt limit. It 
     requires a two-thirds vote to raise taxes. And in forbids 
     courts from ordering any tax increase. The BBA thus addresses 
     multiple aspects of fiscal policy in a full-spectrum response 
     to America's debt-and-deficit nightmare.
       Utah's predominance regarding a constitutional amendment is 
     no surprise. Hatch is the former chairman of the Senate 
     Judiciary Committee and was talked up as a potential Supreme 
     Court nominee years ago. Lee is the only former Supreme Court 
     law clerk in the Senate, and is already mentioned as a 
     potential Supreme Court nominee. These two senators may be 
     bookends in seniority and age, but they are the foremost 
     constitutional scholars in the Senate.
       The Constitution is extraordinarily difficult to amend, 
     requiring two-thirds of the House and Senate to propose it to 
     the states, then three-fourths of the states (38) to ratify 
     it.
       To turn the BBA into reality, Senators Hatch and Lee are 
     working with a national grassroots organization, Pass the 
     Balanced Budget Amendment, to organize volunteers in every 
     legislative district in America to mobilize political 
     momentum.
       We are very grateful to have Senators Hatch and Lee as 
     Honorary Chairman. With their leadership, as well as others 
     such as Co-Chairman Ken Buck of Colorado, the BBA has the 
     best chances of passing since America's fiscal mismanagement 
     began decades ago.

[[Page 19791]]

       This is not just about economic conservatives. We must 
     balance our national budget for the sake of our children's 
     future. And our national debt has now become a national 
     security concern as well. This is the perfect fusion of the 
     three legs of the Reagan Coalition, and will benefit all 
     Americans.
       There are also serious political implications. TBBA could 
     change the national debate. With several GOP presidential 
     contenders endorsing the idea, this will likely be an issue 
     for the 2012 elections. Those of us involved at the 
     grassroots level with this issue and determined on making it 
     so.
                                  ____


             [From the Heritage Foundation, July 21, 2011]

 Balanced Budget Amendment: Instrument To Force Spending Cuts, Not Tax 
                                 Hikes

                          (By Edwin Meese III)

       As Congress considers what to do about federal overspending 
     and overborrowing, conservatives must maintain focus. We must 
     pursue the path that drives down federal spending and 
     borrowing and gets to a balanced budget, while preserving our 
     ability to protect America and without raising taxes. An 
     important part of that conservative agenda is adoption of a 
     sound--repeat, a sound--Balanced Budget Amendment. A Balanced 
     Budget Amendment is not sound if it leads to balancing the 
     federal budget by tax hikes instead of spending cuts. Thus, a 
     sound Balanced Budget Amendment must prohibit raising taxes 
     unless a two-thirds majority of the membership of both Houses 
     of Congress votes to raise them. Without the two-thirds 
     majority requirement, the Balanced Budget Amendment becomes 
     the means for big spenders to raise taxes.
       Supporters of the Balanced Budget Amendment rightly want to 
     force the federal government to live within its means--to 
     spend no more than it takes in. Because the government has 
     failed for decades to follow that balanced budget principle, 
     America is now $14.294 trillion in debt, a debt of more than 
     $45,000 for every person in the United States.
       President Obama is making things worse. In discussions with 
     congressional leaders, he has pushed hard to get authority to 
     borrow yet more trillions of dollars and hike taxes. And the 
     White House reiterated this week that President Obama opposes 
     amending the Constitution to require the federal government 
     to balance its budget.
       A Sound Balanced Budget Amendment Must Require Two-Thirds 
     Majorities to Raise Federal Taxes. Like 72 percent of the 
     American people, The Heritage Foundation favors passage by 
     the requisite two-thirds of both Houses of Congress and 
     ratification by the requisite 38 states of an effective 
     Balanced Budget Amendment to become part of our Constitution. 
     Heritage has made clear that an effective Balanced Budget 
     Amendment must control spending, taxation, and borrowing; 
     ensure the defense of America; and enforce, through the 
     legislative process and without interference by the judicial 
     branch, the requirement to balance the budget. A sound 
     Balanced Budget Amendment will drive down federal spending 
     and end federal borrowing.
       To date, Congress has proposed one largely sound Balanced 
     Budget Amendment for consideration--Senate Joint Resolution 
     10, often called the Hatch-Lee Amendment after its main 
     proponents. It has a number of important features, such as an 
     annual federal spending cap of not to exceed 18 percent of 
     the economy's annual output of goods and services (called the 
     gross domestic product, or GDP) that Congress cannot exceed, 
     except by a law passed with two-thirds majorities in both 
     Houses of Congress or in specified circumstances involving 
     military necessity.
       A crucial feature is included in section 4 of the Balanced 
     Budget Amendment proposed by Senate Joint Resolution 10: 
     ``Any bill that imposes a new tax or increases the statutory 
     rate of any tax or the aggregate amount of revenue may pass 
     only by a two-thirds majority of the duly chosen and sworn 
     Members of each House of Congress by a roll call vote.'' The 
     requirement that no tax hikes occur without the approval of 
     290 Representatives and 67 Senators is essential in a sound 
     Balanced Budget Amendment. Without the requirement for two-
     thirds majorities for any tax increase, the Balanced Budget 
     Amendment becomes a sword for big spenders to use to raise 
     taxes, instead of a shield to protect Americans from tax 
     hikes. Those who seek to anchor into our Constitution a 
     requirement to balance the budget must always remember that, 
     if the only requirement is ``balance,'' that can be achieved 
     two ways--cut spending or hike taxes. A sound Balanced Budget 
     Amendment will balance the budget by driving down federal 
     spending and not by driving up federal taxes.
       Balanced-Budget States that Allow Simple Majorities for Tax 
     Hikes Face Situations Very Different from that of the Federal 
     Government. Some look at the experience of states that have 
     requirements in their constitutions for a balanced state 
     budget and draw the wrong conclusion about the need for two-
     thirds majorities for taxation. They mistakenly conclude that 
     a requirement merely for simple majorities in state 
     legislatures to raise taxes suffices to keep state taxation 
     under control and therefore that a federal Balanced Budget 
     Amendment should require only simple majorities in Congress 
     to raise taxes. But the balanced budget requirement at the 
     state level occurs in a very different context from such a 
     requirement at the federal level.
       As a practical matter, state legislators regularly work and 
     live among the people they represent, often do their 
     legislative work face-to-face with their constituents, and 
     often depend upon direct contact with voters to persuade 
     voters to keep the legislators in office. As a result, state 
     legislators tend to be closely attuned and responsive to the 
     need of their constituents for reasonableness in taxation. In 
     contrast, U.S. Senators and Representatives spend much of 
     their time distant from the people they represent, often deal 
     with their constituents through the insulation of large 
     staffs, and amass large campaign funds through political 
     fundraising that allow them to depend more upon expensive 
     mass communications than upon direct contact with voters to 
     persuade the voters to keep them in office. As a result, U.S. 
     Senators and Representatives tend to be less directly attuned 
     and responsive to the need of their constituents for 
     reasonableness in taxation than state legislators are. 
     Accordingly, while a requirement for merely simple majorities 
     in state legislatures to raise taxes may suffice to keep 
     taxes under control in that state, simple majorities are not 
     likely to keep taxes under control at the federal level--as 
     the experience of federal tax increases in the last 50 years 
     proves.
       Some who recognize the need for taxpayer protection by 
     requiring supermajorities, rather than just simple 
     majorities, of the two Houses of Congress to raise taxes 
     think a supermajority of three-fifths of both Houses would 
     suffice. While three-fifths would add a modicum of taxpayer 
     protection in the House, three-fifths would add little if 
     anything in the way of taxpayer protection in the Senate, 
     which already often requires a three-fifths majority to 
     proceed to consideration of legislation. The existing three-
     fifths rule in the Senate has often failed to protect 
     taxpayers from federal tax increases in the past. A sound 
     Balanced Budget Amendment would add protection for taxpayers 
     in both Houses of Congress by a requirement for two-thirds 
     majorities of the membership of both Houses to raise taxes.
       Conclusion: Adopt the Two-Thirds Majority Requirement for 
     Tax Hikes, to Make the Balanced Budget Amendment the 
     Instrument of Spending Cuts and Not Tax Hikes. America's 
     soon-to-be New Minority--people who pay federal income tax--
     need protection from unreasonable taxation. When all 
     Americans have the right to vote, but only a minority has the 
     duty to pay the federal income taxes from which all Americans 
     benefit, the risk is high that a non-taxpaying majority will 
     elect a Congress pledged to adopt taxation that oppresses the 
     taxpaying minority. The impulse to seek something for nothing 
     has regrettably taken root in the American body politic in 
     the past century. The requirement in the Balanced Budget 
     Amendment of a two-thirds majority of the membership of both 
     Houses of Congress to raise taxes will protect a taxpaying 
     minority against oppressive taxation.
       As Congress continues on the path toward adopting a joint 
     resolution to recommend a Balanced Budget Amendment to the 
     states for ratification, Congress should ensure that the 
     Amendment includes a requirement for approval by two-thirds 
     of the membership of the two Houses of Congress for tax 
     hikes. Absent such a requirement, the Balanced Budget 
     Amendment will encourage tax hikes instead of spending cuts 
     as the means to balance the budget, making the Amendment the 
     friend of the tax, spend and borrow crowd, instead of the 
     friend of those who believe in limited government, free 
     enterprise, and individual freedom.

  Mr. HATCH. While a number of liberal groups committed to more 
government spending have lined up against our proposal, there is hardly 
a groundswell of support for the Democratic alternative. In fact, the 
lack of support for that proposal demonstrates more than anything I can 
say that it is a proposal designed with politics in mind. It is 
designed to provide cover for Members who want to say they support a 
balanced budget amendment while opposing the only amendment that would 
actually reduce government spending.
  The bottom line is that not all balanced budget amendments are 
created equal. The Senate Republican amendment is one to restore 
liberty and constitutional government by reducing the size and power of 
Washington. By contrast, the Democrats' alternative promises more of 
the same. It does nothing to rein in spending or address the fiscal 
crisis this Nation faces. The differences between these proposals 
highlight clearly the distinctions between conservatives in Congress 
and the President and his supporters.
  Although I am ever hopeful, I am realistic about the chances the 
Senate will pass S.J. Res. 10 tomorrow. I suspect the vote for the 
Senate Republican amendment will be as low as any

[[Page 19792]]

the Senate has taken on a balanced budget amendment. This, though, 
shows how stark the differences have become between the two parties. 
The Democratic Party is now openly the party of tax and spend, the 
party of bigger and bigger government.
  That is why today's debate and tomorrow's vote represents what Ronald 
Reagan called ``a time for choosing.''
  As President Obama's speech in Kansas showed the other day, he is not 
backing away from his goal of fundamentally reordering American society 
in a way that transforms individuals and businesses into the arms of 
the State. The President, having completely abandoned the political 
middle and thrown in with the far left to secure his reelection, is now 
arguing that it is wrongheaded to believe one's success in life is 
owing to one's own hard work. Because the President seems to believe 
that individual success is ultimately not the result of personal effort 
but, instead, due to society, adherence to and respect for property 
rights, and the simple notion that one owns the fruit of one's labors 
becomes for him and his supporters a quaint artifact of an earlier era 
in American history.
  The candidate of hope and change has turned out to be the President 
of spreading the wealth around. To succeed, he has embraced the 
politics of envy and class warfare that is far outside the mainstream 
of our political heritage.
  The Republicans' balanced budget amendment offers nothing so 
grandiose. All we seek is the restoration of some limits on the power 
of the Federal Government and meaningful reductions in spending, and we 
give the time to get there too in our amendment. All we promote is a 
decent respect for the right to one's own wages and the freedom 
promised in our Declaration of Independence.
  The Senate Republican balanced budget amendment secures these 
blessings of liberty, and I urge every one of my colleagues to support 
it.
  The opponents of this amendment will say it is somehow improper to 
constitutionalize a requirement for a balanced budget. Hogwash. Many of 
those same individuals do not bat an eye when five unelected Justices 
on the Supreme Court rewrite the Constitution to fit their own 
preferred policy goals. Yet it is somehow inappropriate for the Senate 
to send a balanced budget amendment to the people in the States for 
ratification.
  What are they afraid of? The Constitution ultimately belongs to the 
sovereign American people. It is only law because of their sovereign 
actions of ratification and amendment.
  It seems odd the Democratic Party that claims Thomas Jefferson as its 
founder would oppose giving the American people a voice on this 
foundational constitutional issue. After all, if President Obama, the 
progressive Democrat, was so confident in the strength of his 
arguments, he could rest easy knowing the people would decline to 
ratify a balanced budget constitutional amendment.
  So what are they so afraid of? Why are they so afraid to send this 
amendment to the people for ratification? Thirteen States could defeat 
this amendment. All they need to do is get 13 States to go against this 
amendment. That is what it would take to defeat it. That is all it 
would take. But it would be the people who would decide, not just a 
bunch of people here. If that is all the opponents of this amendment 
need, why are they so worried about sending it to the States for 
ratification? Why the lack of confidence in their powers of persuasion?
  I can tell you why. The people of this country would ratify this 
amendment so quickly its opponents' heads would spin. Those who oppose 
sending this balanced budget amendment to the States for ratification 
know the people are eager to ratify it. That is certainly the case in 
Utah. Earlier this year, Utah passed S. Con. Res. 201 expressing 
support for S.J. Res. 10, the balanced budget amendment I introduced, 
along with my friend and colleague from Texas, Senator Cornyn, and my 
friend and colleague from Utah, Senator Lee, as well as 44 other 
Senators, all of whom deserve credit for this amendment.
  I commend to my colleagues the Utah Senate's Concurrent Resolution 
201 of the 2011 Second Special Session.
  Mr. President, I take the instruction from Utah's State 
representatives very seriously. The Utah Legislature made it clear it 
supported ratification of this amendment, and I am confident if the 
Members of this body listen to their own State legislatures--49 of 
which are required to balance their own budgets--similar instructions 
would follow.
  Here is the bottom line. Liberal special interests oppose the Senate 
Republicans' balanced budget amendment because they know the people 
would ratify it. And if the people ratified it, the government-funded 
gravy train would come to an end.
  I look forward to this debate today. It is an important one, and I am 
confident that eventually the American people will ratify a balanced 
budget amendment and restore the promise of America's Declaration of 
Independence and Constitution for future generations.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Kentucky.
  Mr. PAUL. Mr. President, I rise today in support of the balanced 
budget amendment. In fact, it is beyond me to imagine how anybody in 
this body could oppose a balanced budget amendment. I ran my election 
last year primarily on this fact--that government spending was out of 
control and the debt was consuming our country and that we needed new 
and more serious rules to bring the budget under control.
  We have tried in the past. This body passed Gramm-Rudman-Hollings 
with bipartisan support in the 1990s and immediately began to evade it. 
This body passed pay as you go and then proceeded to disobey their own 
rules 700 times. And we wonder why 9 percent of the people approve of 
Congress? It is because we cannot even obey our own rules.
  So we need new rules. We need a balanced budget amendment that would 
be an amendment to the Constitution because we do not adhere to the 
rules we pass. This body is literally out of control.
  Now, the other side says: Trust us. Trust us. We can balance the 
budget. The other side hasn't passed a budget this year or last year--
not just a balanced budget, the other side can't pass any budget. So I 
think we need new and stronger rules to force us to do what is right, 
do what every American family has to do; that is, balance their family 
budget. A nation is no different. A nation has a printing press and can 
run deficits for longer, but there are ramifications.
  The enormous debt we are accumulating as a country--we are borrowing 
$40,000 every second. During the time of my 5-minute speech, we will 
have borrowed millions of dollars. So there are ramifications. We have 
to pay for our debt in some way. We can either tax people or we can 
borrow--we are at the limits of both--or we can simply print the money. 
But as we print money to pay for our debt, we destroy the value of the 
existing currency. So those who have savings, those who are on fixed 
incomes--senior citizens, the working class--those who use every penny 
of their paycheck to pay for their needs are being robbed on a daily 
basis by inflation. Inflation is the end result of debt.
  If we look at the approval of Congress being 9 percent, and we 
contrast that with how much of the public is for a balanced budget, 75 
percent of the public--Republicans, Democrats, and Independents--would 
vote in favor of a balanced budget amendment. Yet this body is out of 
touch because we can't get anybody from the other side even to talk to 
us about a balanced budget amendment. We worked for months to see what 
it would take to make one acceptable to the other side, and we got 
nowhere.
  We need to balance our budget because the debt is a threat to our 
country. This is not just me saying this. The Chairman of the Federal 
Reserve has said our debt is unsustainable. Admiral Mullen, part of 
this administration, has said our debt is the greatest

[[Page 19793]]

threat to our national security. Erskine Bowles, who led the deficit 
commission and has been known as a Democrat, said we are approaching 
the most predictable crisis in our history, and it will be a debt 
crisis.
  All throughout Europe there is a debt crisis: Italy is having trouble 
paying its debt; Greece is underwater; Portugal, Spain, and Ireland are 
all tenuously holding on and trying to pay their debts. That European 
crisis, that destruction of the Euro, is coming this way. Our debt now 
equals our economy.
  Senator Hatch mentioned we have a $15 trillion debt and a $15 
trillion economy. Many economists say when our debt approaches 100 
percent of GDP--where ours is now--we are losing 1 million jobs a year. 
So this is having a drain on the here and now. It is not just that this 
debt is being passed on to our kids and grandkids. The debt is 
affecting jobs.
  When I talk to college kids, I say: The chance of you getting a job 
depends on what we do with the debt. If we continue to finance our 
spending through debt, you will not have a job. You will have less 
likelihood of getting a job.
  Now, some say it would be too hard to balance the budget. It is just 
too far out of whack. We can't do it. It is pretty bad. We are 
borrowing 40 cents on every dollar. If we look at the spending, 
borrowing 40 cents on every dollar is remarkable. When we look at our 
budget, the revenue coming in is being consumed by entitlements and 
interest. Everything else we spend--national defense, roads, everything 
else--the rest of the 40 percent of the budget is being borrowed. It is 
out of control.
  Can you imagine any business or any family in this country borrowing 
40 percent every year, year after year after year? It can't be done. 
There are ramifications and a day of reckoning is coming.
  Some say: How could we ever balance our budget? I will tell you how. 
If we cut 1 percent of spending--this is called the penny plan--cut one 
penny out of every dollar in Federal spending for 6 years and freeze 
spending for 2 years, the budget will balance in 8 years. If we were to 
pass a balanced budget amendment and send it to the States, there is a 
5-year window in the amendment, plus it takes a couple of years to 
pass, so it would be about 8 years.
  So we could balance the budget in 8 years simply by cutting one penny 
out of every dollar. One might ask: How could that be, when they are 
cutting trillions of dollars and not balancing the budget? The reason 
is, when they talk about cutting spending around here, they are always 
talking about cutting proposed increases in spending. They are never 
talking about real cuts in spending. What I am talking about is a real 
cut.
  We spend $3.8 trillion in our budget this year. One percent is $28 
billion. Next year, we would spend $3.8 trillion minus $38 billion. A 
real cut of 1 percent each year for 6 years balances our budget in 8 
years. It could happen, but it is going to take some resolve.
  People need to understand the alternative. The alternative, if we do 
nothing, is that our debt is going to consume us as a nation. We have 
been warning about this for some time. Senator Hatch has been active. 
The last time we voted on this was in 1997. Fourteen years later we 
have had a significant revolution at the polls, and people are anxious 
to say: Do something, protect us from this mountain of debt. Yet there 
is still great resistance in this body.
  I would say people in this body who vote against the balanced budget 
amendment do so at their own peril and do it against the will of the 
people. If they think it is so important to continue to accumulate 
debt, and that debt is fine, they should vote against this amendment. 
But they are thumbing their nose at the people. They are thumbing their 
nose at the American people who are very worried about our Republic and 
very worried about this debt.
  So, Mr. President, I rise today in support of the balanced budget 
amendment and encourage my colleagues to give serious thought to voting 
for this amendment.
  The PRESIDING OFFICER. The Senator from Louisiana.
  Mr. VITTER. Mr. President, I too rise in strong support of the 
balanced budget amendment--the strong, meaningful, balanced budget 
amendment presented on this side of the aisle because it is an 
important, necessary effort to rein in the biggest economic problem and 
threat we have facing us.
  I want to dovetail and expand on some of Senator Paul's comments, 
with which I certainly agree.
  First of all, I hope it is perfectly clear that our debt--our 
growing, unsustainable level of debt--is a clear and present danger and 
an immediate danger to our Republic, to our democracy, to our economy, 
and to our future.
  Overspending has been a problem for quite a while in Washington. It 
has been a problem under Republican and Democratic administrations and 
Congresses. But forever it was a problem because we were passing on 
these big debt figures, this big burden to our kids and grandkids, and 
we were kicking the can down the road. It was a problem for the future 
which we should correct now but largely a problem for the future.
  As Senator Paul said, that is not true anymore. It is an immediate 
threat right now. It is not a question of just our kids and grandkids; 
it is a question of next month, next year, whether we avoid a crisis, 
as is brewing in Europe, which could be the biggest hit to our economy 
since the Great Depression, bigger than what we went through in 2008. 
So this issue is an immediate threat, and it is not some esoteric issue 
about balance sheets. Again, as Senator Paul said, it is an immediate 
threat to the health of our economy, to the prospect and ability of 
Americans, including young Americans coming out of college, to get good 
jobs, to settle into good careers.
  The second thing, which I hope is obvious, is that to get ahold of 
this problem, to deal with this threat, Congress needs enforced 
discipline. We need a fiscal straitjacket because we have proven, 
unfortunately, over and over, under Democratic and Republican 
majorities, under Democratic and Republican Presidents, that we are not 
going to do it on our own. We need the enforced discipline--the fiscal 
straitjacket, if you will--of a balanced budget amendment.
  Why do I say this? Well, even knowing the threat we face right now, 
what does Congress do? Congress passes a debt plan. We pass cuts. While 
the so-called cuts of $2.1 trillion sounds like a lot of money--it is 
in some sense--it is largely cuts to the growth of government spending. 
Even under this plan that Congress recently enacted, we are still 
racking up new debt. We are still adding on $7 trillion to our already 
unsustainable level of debt in the next decade, increasing it 50 
percent, from $15 trillion to $22 trillion. That is the best we can do 
without enforced discipline even in the crisis atmosphere we have now, 
even with the understanding we have now. I hope that proves we need 
this enforced discipline. The balanced budget amendment Republicans 
have put forward gives us that discipline we need.
  First of all, I wish to compliment so many who have worked with me on 
it--Senator Hatch, Senator Lee, many others. I was in the working 
group, and I was in several meetings to get the details right because 
the devil is in the details. We don't need a fig leaf. We don't need a 
talking point. We need a balanced budget constitutional amendment that 
will work.
  The details are right in this proposal, and it will work. Why do I 
say this? Well, within 5 years of ratification, under the amendment, 
Congress must pass a budget, the President must submit a proposal that 
is balanced, but not only that, the size of the Federal Government is 
limited to 18 percent of GDP. That is the long-term historical average 
of revenues in modern history. That is where we need to be. That is not 
my decision; that is not the decision of a single Member of Congress; 
that is the average of where revenues have been in the modern period.
  It requires a strong supermajority to ensure that we don't continue 
the practice of exceeding spending caps with gimmicks and emergency 
spending for

[[Page 19794]]

things that are not truly emergencies. For instance, a two-thirds vote 
of both Houses is required for a specific deficit for a fiscal year. A 
majority vote is required for a specific deficit when we have a 
declared war, and it needs to be a declared war in that instance. A 
three-fifths vote is required for a deficit during a military conflict 
and--this is important--with the requirement specifically that that is 
``necessary by the identified conflict.'' In other words, the overage 
from a balanced budget is only for that conflict, not just a general 
exemption. A two-thirds vote of each House is required to increase 
taxes, and that is important so that this is not just a mechanism for 
ever-increasing tax rates that will quickly stagnate the economy. A 
three-fifths vote of each House is required to increase the debt limit, 
which is also important.
  The details are important. I am confident we have gotten the details 
right in this proposal.
  We also have a Udall proposal, a Democratic balanced budget 
constitutional amendment. Unfortunately, I think that gets the details 
very wrong. I am pleased that Senator Udall and Democratic colleagues 
on the other side are committed to the notion of a balanced budget 
constitutional amendment. That is important, and that is progress. But 
the devil is in the details, and I am afraid they got some of those 
details very, very wrong. For instance, there is a huge loophole 
exemption for whenever the country is in a military conflict--not just 
a formally declared war but any military conflict. Unfortunately, we 
are going to be in that situation for a lifetime under the present war 
against terror, so that is a huge, gaping loophole. Under that 
loophole, the amount beyond a balanced budget which is allowed isn't 
specific to that conflict, it is just a general exemption. So it is a 
big loophole.
  There are other loopholes too. Social Security is completely exempt 
from this structure. I think that is a big mistake because that is part 
of our budget situation and because we need this very enforced 
discipline to fix and to save Social Security. That is one of the top 
items I want to fix and save. That is one of the first places we need 
this enforced discipline to fix and save Social Security.
  I urge all of my colleagues to come together behind this important 
and necessary enforcement tool. The American people recognize the 
problem. They recognize this--a strong, meaningful balanced budget 
amendment--as an important part of the solution. They want us to act in 
a positive way, and I urge that support for this balanced budget 
amendment and for that solution.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. DeMINT. I wish to thank my colleague from Louisiana, who has made 
great points about where we are.
  I do think it is good news that we are talking about balancing the 
budget, but unfortunately, as we often do, this is really a political 
show more than a real attempt to actually balance the budget. The whole 
process is set up to fail.
  We know the President has said that we don't need to balance our 
budget and that it is an extreme idea. The majority leader here in the 
Senate has called a bill that cuts spending and caps spending and sends 
a balanced budget amendment to the States to ratify the worst 
legislation he has ever seen. Nancy Pelosi, the Democratic leader in 
the House, has said that to balance the budget would cost jobs and that 
we would do it on the backs of the poor. Now we are to believe that our 
colleagues on the Democratic side here are serious about working with 
us to balance the budget.
  The situation is too serious to just play politics, and I know from 
talking to a number of my Democratic colleagues that they feel the same 
way, that they know we need to balance the budget. It is very difficult 
for them as a party because a lot of their platform is based on more 
promises for government and more government spending.
  In effect, a balanced budget amendment that meant we couldn't spend 
more than we were bringing in would change politics in Washington 
forever, which is something we have to do. But at least we are 
discussing the idea of balancing the budget.
  We know that the President's budget, the only budget we have seen--we 
haven't seen one out of the Senate in the last several years--increased 
our debt another $10 trillion over the next 10 years. It didn't balance 
it.
  Just about every Republican voted for a budget, a 10-year budget 
offered by Senator Pat Toomey that balanced in 10 years without cutting 
Social Security or Medicare. So we can do it. We can do it without 
hurting Americans. If we do it now, we can actually control our own 
destiny rather than what we see across the Atlantic in Greece and other 
European countries. They lost control of their destiny. They are now in 
the control of other countries and of fate. But America is still in a 
position that, if we make the decisions now to begin the process to 
balance our budget, even if it took 10 years, we could save our country 
and perhaps save freedom for the world. But there is no question that 
if we continue on the same course we are on today, we will bankrupt our 
Nation, lose control of our destiny, and change the world forever. But 
at least we are talking about balancing the budget, and maybe that is a 
good first step.
  Today, the Democrats have offered a weak alternative to the 
Republican balanced budget so that they can say they are for it. Again, 
I think that is important to get on record, that we are at least for 
the idea of stopping spending more than we are bringing in. For the 
past 2\1/2\ years, as I mentioned, the Senate Democrats, who are in 
charge here, haven't even produced a budget, let alone the idea of 
balancing one. President Obama, as I said, proposed a budget that 
doubled the national debt in the next 10 years. That is not responsible 
leadership at a time when we are already at an unsustainable debt 
level.
  Despite all the bipartisan promises to cut spending, Washington is 
still voting to make government bigger and more expensive than ever. 
And this includes some Republicans joining the fray here to just 
increase spending. Federal spending went up 5 percent in the first 9 
months of the year despite all the hoopla about us doing something 
about spending.
  There is one way to judge whether we are cutting spending or not, 
despite all the rhetoric here and the Washington-speak. If we want to 
know whether we are spending more, we just have to ask ourselves: Are 
we spending more than we did last year? The answer is yes. And we are 
going to spend more next year than we did this year, based on the bills 
we are passing this week and next. So this isn't austerity. It is 
gluttony. It is political gluttony.
  Since Obama became President, the debt limit has been raised four 
times. The debt is rising faster and higher than ever. Yet the Senate 
refuses to pass a budget or cut spending. We must budget and balance 
the budget or we are going to bring down our whole country.
  Republicans have offered a strong balanced budget amendment that 
limits government spending to 18 percent of gross domestic product--
GDP--and requires a two-thirds majority to raise taxes, and it has 
earned the support of every Republican in the Senate. That is pretty 
unusual for us. Passage of that amendment should have been tied to the 
last increase in the debt limit, but it wasn't. President Obama was 
given another $2 trillion to borrow, and Americans received nothing in 
return, no cuts in spending.
  The Democratic amendment differs in three ways from the Republican 
amendment.
  What Republicans are trying to do is to reduce the level of spending 
relative to our total economy and to make sure it is difficult to raise 
taxes to balance the budget. And we should all agree on that. We 
shouldn't go back to the taxpayer every time we spend too much. The 
emphasis should be on reducing our spending. But the Democratic 
amendment doesn't cap spending to the historical levels, which means we 
can balance the budget by raising taxes and continuing to increase 
spending. So our

[[Page 19795]]

amendment is designed to cap that spending at a certain level.
  Secondly, the Democratic balanced budget amendment does not require a 
supermajority to raise taxes. So during regular order here, we can 
increase taxes to meet the requirement to balance the budget. It would 
be a nice safeguard for the American taxpayer that we would at least 
have to get a supermajority to raise taxes in order to balance the 
budget.
  For some reason, the Democratic balanced budget amendment inserts 
just an element of class warfare, saying that we cannot decrease taxes 
on those making over $1 million. It doesn't sound like something we 
would do anyway, but it is not something that should be part of a 
constitutional amendment that we send to the States to ratify.
  The strong Republican balanced budget amendment would force both 
parties to find ways to cut spending and reform entitlements. Those are 
the things we have to do. The weaker Democratic version does not do 
that because it preserves the status quo where it is easier to raise 
taxes than cut spending, which is where we are today.
  For the past 2\1/2\ years, Senate Democrats have not produced a 
budget, let alone a balanced one. President Obama proposed a budget 
this year that doubled the national debt. Again, that is not a budget; 
that is a loan application and this country cannot continue to operate 
based on more borrowed money and more spending and more threats of 
raising taxes.
  If we want to get the economy going and balance our budget, we have 
to cut spending. That is the whole idea of the Republican balanced 
budget amendment. Let's get serious about saving our country and the 
freedoms for which so many have fought. If we do not do it soon, we 
will lose control of our destiny.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Texas.
  Mrs. HUTCHISON. Madam President, I rise today to join many of my 
colleagues, as Senator DeMint has said, to endorse the balanced budget 
amendment that Republicans are offering. We have 47 Republicans in the 
Senate and there are 47 cosponsors and supporters of this approach to a 
balanced budget. Our approach addresses the fundamental problem in 
America and that is government spending. Big problems require bold 
action. Today's staggering national debt, $15 trillion, is crippling 
our economy. We must take action to stop it.
  The 40-year average of total U.S. Federal Government spending is 20.8 
percent of gross domestic product. For 2011, Federal spending was 24.1 
percent of GDP. Looking forward, if we stay on the same course we are 
on, Federal spending is projected to be 40 percent of GDP in 2046, and 
by 2085 it will reach 75 percent of GDP. We are reading a lot of 
stories about European countries that are doing exactly what we are 
talking about how the future for America will look like if we do not 
curb spending right now.
  Some of my colleagues on the other side of the aisle think increasing 
taxes will reduce the deficit. However, the facts state otherwise. The 
trajectory of government spending, as I have outlined, could not be met 
with tax increases. There are not enough tax increases if you went to 
100 percent rate of tax. There would not be enough to support that kind 
of government spending.
  In addition to that, as we have been saying, increasing taxes is 
going to lower the capability of our small businesses to hire. That is 
what we are trying to spur right now, more employment. It is going to 
take systemic changes in government spending to get the debt and 
deficits down in this country. Lower spending is the only way we can 
have the systemic changes that are necessary to lower the government 
burden so the debt begins to get less and less.
  My colleagues across the aisle have proposed their solution with a 
different approach to a balanced budget amendment. In our opinion, it 
is flawed because it fails to include a supermajority requirement to 
raise taxes and it separates Social Security from the Federal budget. 
That might seem like a good idea on its face, to assure that Social 
Security never goes under because there would not be a connection 
between Social Security and the Federal budget, but in fact as we speak 
today it is part of our Federal budget because the Social Security 
outlays exceed what is coming in revenue from Social Security. 
Excluding Social Security from our Federal budget would not solve our 
deficit spending or shore up Social Security's finances for current and 
future generations. Right now, Social Security is on a glidepath toward 
insolvency.
  I firmly believe that entitlement reform is vital to any long-term 
solution to our Nation's financial problems. It is essential that we 
assure the markets that long-term financial challenges are being 
confronted, and that includes entitlement reform so that Social 
Security will be on a glidepath toward solvency rather than the other 
way around.
  Earlier this year I proposed a modest Social Security reform that 
would gradually increase the retirement age so it more closely 
resembles today's actuarial tables and life expectancy. It would 
decrease the annual cost of living slightly by adjusting it if 
inflation exceeds 1 percent. If inflation exceeds 1 percent, then you 
would have a cost-of-living adjustment. Otherwise, you would not.
  In addition to spending reduction and entitlement reform, we need 
long-term progrowth tax policies in place, not constant threats of tax 
increases. When we hear our small business people talking about why 
they are not hiring--because I think probably every one of us in this 
Senate as we travel around our States and in the country asks our small 
business people why aren't you hiring? Why aren't you adding to our 
economy?--they say two things. They say, No. 1, the regulations of this 
country are driving them down. It is like a blanket over their 
capability to produce, get more traction and hire people. So it is 
overregulation that we are seeing rampant in this administration.
  The second thing is our President is always talking about tax 
increases. He talks about it every time I see an interview or a speech. 
Those people out there need to pay more taxes. You know what, if you 
are being constantly threatened with more taxes, you know you have to 
look at your budget and adjust, and that adjustment usually means you 
are not going to hire people if you know your expenses are going to go 
up through regulations and more taxes.
  If we are going to make conditions in this country better for private 
sector job growth in this country, which certainly would lead to a 
stronger economy, we have to address spending and tax policy. Our 
balanced budget amendment moves forward on these fronts. We reduce 
spending responsibly, to put our country on a fiscally responsible 
path. We can shift the spending trajectory in this country by passing 
the balanced budget amendment and implementing a long-term plan that 
caps Federal spending. The Federal Government has grown exponentially 
in the last few years. We cannot sustain that. That is not a 
responsible position when we know unemployment is almost 9 percent. We 
have to have policies that will encourage employment. That is the way 
to grow revenue.
  We can grow revenue, but not by taxing the people who are hiring. 
Rather, we can do it by giving them a regulatory playing field that is 
responsible and not overbearing, and by making sure we have not only a 
tax policy that encourages hiring but one that is stable and 
predictable.
  If taxes are going to change every year, that is not predictable and 
it is not stable. I hate it when I talk to an international company and 
I am talking to someone in that company--maybe the CEO, or chief 
financial officer--and I say, why are you moving that part of your 
company overseas? They will invariably say: Because there is a better 
regulatory environment.
  That is shocking. It is shocking for an American CEO to say we can 
better predict what the conditions for regulations are in foreign 
countries than we

[[Page 19796]]

can in America. That is not the foundation to revive our economy.
  We have a balanced budget amendment that we believe addresses the 
issues of this economy. It will put caps on Federal spending. It will 
start bringing down the size of government to meet the gross domestic 
product of our country. Right now it is off balance and we need to put 
it right so we do start hiring in this country in the private sector. 
Hiring in the government sector is not a long-term growth strategy. We 
need jobs in the private sector for permanency and we will do that with 
a balanced budget amendment that puts caps on spending. Systemic change 
is what is necessary in this kind of environment. I hope Members on 
both sides of the aisle will look at these amendments and realize we 
could help the jitters in the market get calmed by addressing this in a 
long-term way.
  The balanced budget amendment we are offering--and we will vote on 
tomorrow--is the best approach. It is looked at by people in the real 
world, the business world, the hiring world. They are saying what they 
need is stable regulatory environment and taxes that are not 
confiscatory so they will have the ability to hire more Americans and 
create greater revenues through people who are working and producing--
people who are going to pay taxes, people who are going to export and 
keep our economy on a growth pattern rather than one that continues to 
sit there with a high unemployment rate that is stagnating our country.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Wyoming.
  Mr. BARRASSO. Madam President, I rise today to join with the Senator 
from Texas and agree with her about the need for a balanced budget 
amendment to the Constitution and agree with her comments about the 
economy in this country and our need to focus on jobs and debt and the 
spending. I agree with her and I agree with the majority of the 
American people. That is why I am here today to talk about the balanced 
budget amendment to the Constitution.
  We are at a time in the calendar year where the holidays are rapidly 
approaching. Americans across the country are looking very closely at 
their budget. That is what families do, they look at their budget and 
they consider what costs are out there and what money is available to 
deal with those costs. They are looking at gifts and travel and holiday 
celebrations. They are carefully balancing their regular monthly 
expenses with these additional special costs in order to avoid starting 
the new year with a mountain of new debt. Americans understand there 
are consequences for irresponsible spending. Folks know if they make 
decisions which they later decide were not the best decisions, then by 
New Year's Day bills will come due and they will have real concerns.
  Formulating a responsible budget is not always easy, but it is 
absolutely necessary. It is the right, the reasonable, and the 
responsible approach. The problem is, unlike the rest of this country, 
Washington does not seem to be concerned about responsible budgeting. 
In fact, Washington does not seem to be concerned about any kind of 
budgeting. In Washington, the President is responsible for submitting a 
budget every year. Congress is then responsible for passing a budget 
every year. It has not happened this year; it did not happen last year. 
The House of Representatives did their job when they passed Paul Ryan's 
budget, but this body, the Senate, did nothing. In fact, this Senate 
has not passed a budget in over 950 days.
  What has happened in the last 950 days? Well, in 2010, the Chairman 
of the Joint Chiefs of Staff said: ``The single biggest threat to our 
national security is our debt . . . '' The single biggest threat to our 
national security is our debt. Washington did nothing.
  A year ago this month, the President's bipartisan commission made 
recommendations to rein in the debt. The recommendations have been 
largely ignored. More recently, the Joint Select Committee on Deficit 
Reduction failed to present a plan to cut $1.2 trillion from the 
deficit as required by the legislation. Our national debt is now over 
$15 trillion. Our credit rating has been lowered for the first time in 
the history of this great Nation. So here we are, $15 trillion in debt 
and no real plan to get out of it. The American people deserve better. 
They expect better.
  Back home in Wyoming folks understand the importance of balancing 
budgets and living within their means. What they don't understand is 
why Washington doesn't get it. A constituent from my hometown of 
Casper--Mike Brewster is his name--wrote to me earlier this year. Folks 
in Wyoming like Mike get it. Mike wrote:

       One of the values that makes our state and our communities 
     so strong is being financially solvent. We do not spend more 
     than we make. If we max out our credit cards, we don't ask 
     for higher credit limits, we cut our spending. To do anything 
     else would label one a fool.

  Referring to the national debt, he went on in his letter and said:

       Let's be clear; this is a crisis. This crisis wasn't caused 
     by a lack of revenue; it was caused by spending way beyond 
     our means. The only logical solution is to reduce spending--
     that is the ``Wyoming Way.'' That is what your constituents 
     would have to do if they had the same mess in their personal 
     finances, and that is what you must do to properly represent 
     us.

  Mike is absolutely right, this is a crisis. It is a crisis that could 
have been prevented and a crisis where we need to solve it by doing the 
right thing. If we are going to balance Uncle Sam's checkbook, we need 
to stop charging everything under the Sun to the taxpayers' credit 
card. That means we need to stop spending more than we take in, and in 
order to achieve this, I believe that now, more than ever, we need a 
balanced budget amendment to the Constitution.
  Amending the Constitution is not something I take lightly. This is 
the single most important document in our Nation's history, and I am 
very hesitant to suggest amending it. However, Washington's 
unwillingness and inability to be responsible stewards of taxpayers' 
dollars has left us no choice. We need to begin the long road to 
financial recovery by balancing each and every budget. We do it in 
Wyoming, and Washington should follow suit.
  The balanced budget amendment is not a new idea. In fact, a bill that 
would have sent a balanced budget amendment to the States for 
ratification failed by one vote in 1997 right here in the Senate. Over 
the years many Democrats who serve in the Senate today have voiced 
their support for a balanced budget amendment.
  Senator Sherrod Brown, Democrat of Ohio, said:

       Before I ask for your vote, I owe it to you to tell you 
     where I stand. I'm for . . . a balanced budget amendment.

  That was what he said in 2006.
  Debbie Stabenow had another similar quote in 2000: ``I crossed the 
line to help balance the budget, as one of the Democrats that broke 
with my party.''
  Senator Harry Reid, the majority leader, said back in 1997 when they 
were voting on a balanced budget amendment: ``I believe we should have 
a constitutional amendment to balance the budget. I am willing to go 
for that.''
  Senator Tom Harkin said: ``Mr. President, I have long supported a 
balanced budget amendment. I expect to do so again . . . ''
  We could go on and on with Democrats who in the past stood up to 
support a balanced budget amendment.
  It seems to me if folks on the other side of the aisle are serious 
about balancing the budget, they will support the only balanced budget 
resolution with teeth. The Republican plan imposes real spending 
discipline that cannot be undermined by simply raising taxes on hard-
working Americans. If we are going to amend the Constitution, we need 
to make sure the balanced budget requirement cannot be easily 
sidestepped by either party. The Republican plan does just that.
  Our creditors will not wait for a politically convenient time to 
collect our debts. We simply cannot afford to wait any longer to reduce 
those debts. Irresponsible, unsustainable spending and debt has 
consequences, consequences we simply cannot afford to pay.

[[Page 19797]]

  If you don't believe me, look at Europe. Everyone in this body needs 
to take a long, hard look at Europe and then decide what future they 
want for our great Nation. This is not about doing what is right for 
Democrats or Republicans; it is about doing what is right for all 
Americans and for this entire country.
  As Art Middlestadt from Cheyenne, WY, said in a recent e-mail: 
Allowing our children to suffer the consequences of Washington's 
reckless budgeting is unconscionable. Well, this is about showing Art 
and the rest of America that we hear them and we understand them. 
Families know this, individuals know this, and the sooner Washington 
knows this, the better.
  I urge all of my colleagues to vote in favor of balancing the Federal 
budget.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Oklahoma.
  Mr. INHOFE. Madam President, one of the things about a debate such as 
this is that I have something I always do, and that is I will sit down 
and cross off things I was going to say that somebody else has already 
said. Unfortunately, almost everything has been said, but there are a 
few things that have not. I wish to put this in a more of a historic 
perspective.
  I can remember back in 1968. In 1968 I was elected to the Oklahoma 
State Senate, and at that time we were all concerned about the deficit 
spending and the debt in this country. I remember so well a kind old 
gentleman from Nebraska. He was U.S. Senator Carl Curtis. Carl Curtis 
contacted me--because I was kind of an aggressive person at that time--
and said, I have an idea. I have been up here trying to pass a balanced 
budget amendment to the Constitution and I have been trying for years 
to do it. One of the primary objections they have is they could never 
get the majority, the three-fourths necessary to ratify the 
Constitutional Amendment. He said, this is my idea: Let's go ahead and 
get three-fourths of the States to preratify a budget-balancing 
amendment to the Constitution. I thought that was an ingenious idea, 
and so we did.
  I passed a resolution in the Oklahoma State Senate in 1968 that said 
we were going to preratify it. In fact, we came within one State of 
having the three-fourths necessary to do that; not that that would have 
preratified it, but it would have taken away the argument that Carl 
Curtis had that they objected to in that they would never be able to 
ratify this in the States. I thought that was a great idea. We came 
close to doing it way back in 1968. I remember this very well. I was 
trying to impress upon the American people how much that debt was, and 
at that time the debt was $240 billion. I said, if you take dollar 
bills and stack them up, by the time you get to $240 billion, it is the 
height of the Empire State Building. That was only $240 billion.
  A lot of the groups and Members who are opposed to passing the 
balanced budget amendment think we don't need one. They actually 
believe Congress and the President can balance the budget without any 
enforceable accountability. But in 1986 when the amendment failed by 
one vote--and I remember that year so well because that was the year I 
was elected to the House of Representatives here in Washington--the 
national debt at that time was $2.1 trillion. By 1997, when the Senate 
considered the amendment again, the debt had risen to over $5 trillion, 
and it got up to about $10 trillion when this President took office, 
and that is where this all starts.
  What has happened since President Obama has been in office is 
something that is totally unprecedented in the history of this country. 
In the years he has been there, it has gone up 42 percent. I was 
concerned back in 1968 with $248 billion, and now the increase in this 
short period of time has gone from $10 trillion to $15 trillion.
  I think everyone knows the need to reduce spending is evident. We 
don't have to do anything more than look across the Atlantic. I think 
my friend from Wyoming covered that pretty well. When you stop and 
think what has happened to these countries over in Europe--and it is 
not just Greece and Italy; there are other countries too. They could 
not resist their insatiable appetite to spend money they did not have. 
What has happened there is happening in this country. I agree with my 
friend from Wyoming, we are right behind Europe in this case.
  I remember, and probably everyone in this Chamber remembers, during 
your elementary years reading about the history of this country. A guy 
named Alexis de Tocqueville came to the United States. He came here, 
oddly enough, to study our penal system. That was back in the founding 
years of this country. When he got here, he was so impressed with the 
wealth of our Nation that he stayed and wrote a book. In this book he 
talked about how one plot of land was given to each person who came 
over and they were able to keep the benefits of their hard labor, and 
the prosperity was indescribable at that time. It is said in the last 
paragraph of the de Tocqueville book that once the people of this 
country find they can vote themselves money out of the public trust, 
the system will fail. That is why I say this is not an ordinary time. 
This is not 1968, 1986, 1997, where we tried this before. This is to 
the point where we will realize the accuracy of de Tocqueville's 
prediction.
  It has been publicized recently that 47 percent of the people are not 
paying Federal taxes and not paying income taxes. That is dangerously 
close to that 50 percent he was talking about several hundred years 
ago. So this year Washington has been patting itself on the back with 
the Budget Control Act we passed in August which cut spending by $900 
billion over the next 10 years. We are slowly starting to chip away at 
appropriations bills. These have not been as advertised. They have not 
come close to solving the problem. This is demonstrated by the fact 
that next year's deficit is still expected to be right around $1 
trillion. I know this is kind of offensive to some of the people who 
participated in this great committee that was charged with the great 
responsibility of finding $1 trillion over 10 years.
  When I talked to a large chamber group in Oklahoma on Monday 
morning--we had over 500 people there--I said: Can you understand what 
is happening here in terms of the request that has been made of coming 
up with $1 trillion over 10 years?
  As the Senator from Wyoming said, the President submits a budget. It 
is not the Democrats, not the Republicans, not the House, not the 
Senate. It is the President. He has now submitted three budgets. In his 
three budgets he has had deficits each year of almost $1.5 trillion.
  I remember in 1997 going down to the floor when Bill Clinton was 
President of the United States, and that was the first $1.5 trillion 
budget to run the country. That was $1.5 trillion to run the entire 
United States of America. Yet this President has come up $1.5 trillion 
in deficit over and above the revenues we had each year for 3 years.
  If you have the requirement of coming up with $1 trillion over 10 
years and yet this President has increased the deficit by almost $5 
trillion in the short period of time--it probably will be $6 trillion 
by the time the last budget is realized--then how in the world are you 
ever going to dig out of this? Well, the answer is you cannot.
  Further, when I was talking to the people in Oklahoma on Monday, and 
I said, the requirement for the first year was $44 billion--if you take 
$44 billion as a requirement to cut spending in the first of 10 years 
and yet the President has had an increase of $1.5 trillion in his 
budget for 1 year, obviously that is not much of a requirement.
  Obviously, that is not much of a requirement. That is not going to 
do. So to me that demonstrates what we are not able to do without 
having a balanced budget amendment to the Constitution. The amendment 
we have makes it difficult to raise taxes. It also requires that the 
President and Congress pass a balanced budget each year. It does 
something else that is very significant. The amendment would also limit 
the amount of spending allowed to 18 percent of GDP, which is the 
historic level of revenue the Federal Government has collected since 
World War II.

[[Page 19798]]

  So it covers these things. People complain about it, saying: Well, we 
do not know. There could be times of crisis. There could be times of 
war.
  This has it built in. If we are in a declared war, you do not have to 
follow the guidelines in the balanced budget amendment. In fact, you 
could actually violate it because that is in times of war. We 
understand that. If it is not a declared war, you can do it with a 
supermajority. So this has those built in safeguards to take care of 
contingencies that we cannot determine what they are right now, such as 
war, such as a crisis we have.
  Now, some of those people--not too many people will come to the floor 
and say this, but in their own minds they still believe this idea that 
more government spending can actually make the economy grow. And I do 
not know how they can still believe that after what they call the 
American Recovery and Reinvestment Act. It was $825 billion. That was 
supposed to be a stimulus package. That was supposed to stimulate the 
economy. Yet only 3 percent of that actually went to things that 
specifically would stimulate the economy, such as roads, bridges, and 
things we were supposed to do. It was all financed with extra 
government debt and with projects such as Solyndra, which has gotten a 
lot of attention recently, and other projects. It was more social 
engineering. We all know that. So we know you cannot increase spending 
to pull us out of the situation we are in. They also said that would 
cause the unemployment rate to get down to well below 8 percent. Of 
course, we know now that it did not do that. So none of the projections 
actually came to be realized. The economy is still very weak despite 
the fact that the President was able to secure nearly $1 trillion in 
stimulus spending. It did not help this time. It is not going to help 
again. It never helped in the past.
  To enforce the amendment, the courts would be prevented from 
mandating tax hikes. Further, to raise the debt limit, a three-fifths 
majority of both Chambers--both, not just one--would be required.
  So it does take care of all of these contingencies that I think would 
be necessary and answers the complaints that people have who say it 
would be dangerous to have a balanced budget amendment.
  I know it works. The funny thing about it, when they say it will not 
work, look at the laboratories we have for the Federal Government. My 
State of Oklahoma, balanced budget amendment. It has all of these 
things built into it. In fact, it is not as generous as the one we are 
advocating. But nonetheless, I remember my years in the State 
legislature. We would get up toward the end of the year, and they would 
say: Well, wait a minute, we can't do that because we can't go into a 
deficit. If the States can't do it, we can pass the same thing.
  So I would merely say, try to put it in the historic perspective. If 
you do that, then you will see why it is a sense of urgency that 47 
percent of the people are on the receiving end of government. It would 
turn around and get to that point where, as Tocqueville said, we cannot 
go beyond.
  Remember in 1968 the Carl Curtis thing. That was a $240 billion 
deficit; 1986, $2.1 trillion; in 1990, it was up to $10 trillion. It 
took all of that time to get up to $10 trillion. That has almost 
doubled with this one administration, with this President. So this is 
not business as usual. This is not like the balanced budget amendments 
have been in the past. They are structured very much the same way, but 
the sense of crisis is here.
  I have 20 kids and grandkids. What we do here is not going to affect 
me personally, but it is going to affect future generations. This is an 
opportunity to really do something meaningful.
  I urge the support of S.J. Res. 10, a strong balanced budget 
amendment to the Constitution.
  I yield the floor, and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant editor of the Daily Digest proceeded to call the roll.
  Ms. AYOTTE. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. AYOTTE. Madam President, I rise today to join my colleagues in 
expressing my clear and unequivocal support for a balanced budget 
amendment to our Constitution, Senate Resolution 10.
  With our out-of-control and unsustainable debt threatening nothing 
less than the American dream and the opportunities that will be 
available for our children and our grandchildren, we need to pass a 
meaningful balanced budget amendment, and this, in my view, can be one 
of the single most important steps we can take to get America's fiscal 
house in order and to save our country from looming insolvency.
  Madam President, 49 States in this country have some requirement to 
balance their budget. The Federal Government should be no different. My 
home State of New Hampshire has a legal requirement to balance its 
budget and has long followed this commonsense tradition of fiscal 
responsibility.
  This is a subject I have discussed extensively with my constituents 
over the last year while I have done townhall meetings throughout our 
State focusing on our Nation's debt crisis. I have done a PowerPoint 
presentation to show my constituents the hard numbers on the fiscal 
state of this country. And it is deeply troubling where we are today: 3 
straight years of $1 trillion-plus deficits, over $15 trillion dollars 
in debt, Medicare and Social Security on a path to insolvency as early 
as 2024 and 2036, respectively, and nearly half of our debt--47 
percent--currently is being held by foreign entities, and the single 
biggest foreign holder of our debt is China.
  I also talk about spending and deficits in terms of how it relates to 
your average New Hampshire family. In New Hampshire, if you use 
Washington's budgeting logic where we are borrowing 40 cents of every 
single dollar--in 2008, the New Hampshire median household income was 
$66,000. If you used Washington logic, the amount that family would 
spend would be $107,000 or $41,000 more than they earned. That would 
never fly in New Hampshire where families sit around their kitchen 
tables and they use their common sense to balance their budget. Yet in 
Washington we continue to perpetuate this borrowing to sustain our 
government every day.
  If you look at where we are, one of the most troubling statistics 
that really impacts our economic growth is the share of our gross debt 
to the size of our economy or our GDP. That is now 100 percent. Just 5 
years ago, that ratio was closer to 60 percent.
  As many of us in this Chamber are aware, economists Carmen Reinhart 
and Ken Rogoff have concluded in a study that over the past century, 
for nations that reach where we are, where total debt reaches over 90 
percent of the size of our economy, there is a negative impact on 
economic growth. And we can expect lower job growth and fewer economic 
opportunities. We certainly cannot afford that in this troubling time 
for Americans.
  So not only do we need to get our fiscal house in order because it is 
the right thing to do so we are not dependent on other countries such 
as China to fund our government, we also need to do it so we can 
provide opportunities for future generations of Americans.
  New Hampshire citizens understand we cannot keep spending money we do 
not have. They make those commonsense decisions on their own family 
budgets. Small business owners in New Hampshire are astounded when I 
tell them our Federal Government is operating without a budget. They 
would never run their businesses without a budget. But they do not 
understand why Congress cannot even perform such a basic function of 
passing a budget blueprint.
  It has now been 958 days since the Senate last passed a budget. I 
have to say that I was really honored and excited to be the newest 
appointment to the Senate Budget Committee. However, I have been 
incredibly, incredibly disappointed that we have not in that committee 
done the hard work that

[[Page 19799]]

needs to be done, the thing that is right for this country--to sit 
down, to make the hard choices, to put together a budget blueprint and 
to pass a Senate budget, to have the robust debate on the Senate floor 
about how we prioritize our spending and how we live within our means. 
The American people deserve better. They deserve us to do our job and 
to pass a budget for our country that is fiscally responsible.
  In that time, in those 958 days that the Senate has not passed a 
budget, the Nation's debt has increased by $3.9 trillion. When you 
think about it, it is deeply troubling. I am hopeful that if we bring 
forward and pass the requirement of a balanced budget amendment to the 
Constitution, it will also force Congress to do the basic function of 
putting together a responsible and balanced budget for our country.
  I cannot emphasize enough the urgency of passing this budget control 
measure, the balanced budget amendment, Senate Resolution 10. I think 
it is important for my constituents and the American people to know, if 
we pass the balanced budget amendment in this body, in the Congress, 
this is putting the question to you, to the American people, to decide, 
do you want the Federal Government to balance its budget?
  So when we pass an amendment to the Constitution, we are simply 
sending along to the States the decision of should we amend our 
Constitution. I cannot think of anything more important than sending 
that question to the American people, to our State legislatures, to 
decide should we live within our means; should we be bound by the same 
requirements the States have, by the same common sense we find at home 
to balance our budgets and live within our means.
  Madam President, for fiscal year 2011 we spent 24.1 percent of our 
GDP. That is well above the historical spending average of a little 
over 18 percent, if we go back to 1960 where the revenue we had has 
come in. So we are at a huge trajectory of spending at 24.1 percent. 
Yet in 2011 our revenues only accounted for 15.4 percent of our economy 
because of the difficult times we are in relative to our economic 
growth.
  Under the Republican proposed balanced budget amendment, we put the 
handcuffs in place that are needed to put us on a path to eliminate 
this by capping Federal spending at the historical level of revenue at 
18 percent. Why is this important? It is important because we can't 
continue to spend well beyond our means. We have to acknowledge that a 
meaningful balanced budget amendment will also cap Federal spending at 
its historical levels.
  It is not difficult to see what will happen if we don't get control 
of our fiscal situation right now. Budget shortfalls will only get much 
worse, driven by massive increases in entitlement spending and interest 
payments, and the reality is the failure to act will result in America 
going the way of what we see happening in Europe right now, the way of 
Greece, Italy, and Ireland: our economy in tatters and our standard of 
living greatly diminished.
  We cannot let that happen to our country. We must act now. We must 
pass this balanced budget amendment in the Senate and send that 
question to the House and also send that question to the States so the 
people of this country can decide if we should be responsible and have 
to balance our budget. Left unchanged, Medicare, Social Security, 
Medicaid, and other mandatory health programs alone will eventually 
grow to consume every single dollar of the revenues our government 
takes in.
  Without reform, the Social Security trustees project the program will 
be insolvent by 2036. As a result, beneficiaries may see a benefit cut 
of 23 percent in just 25 years. The Medicare trustees project it is 
even more immediate and dire. The Medicare trustees project Medicare 
will be insolvent by the year 2024.
  It doesn't have to be that way. We need to show the political will 
and courage to reform these programs, make them sustainable, and to 
reform them and preserve them for those like my grandparents, who are 
relying on them, and for future generations to know that these programs 
will be there. But if we fail to take this challenge on now and 
continue to kick the can down the road, then these programs will be 
greatly diminished, and they will continue on an unsustainable path 
that is bankrupting our country.
  In this debate, it is important to remember that in 1997 the balanced 
budget amendment failed to pass this body by only one vote. At that 
time, our national debt stood at $5.4 trillion. We now have a $15 
trillion debt. That debt equates to about $128,000 per household. That 
is a huge amount of money to an average household. Under the Budget 
Control Act, which I opposed last August, the debt will be allowed to 
reach a new limit of $16.4 trillion, left unchecked.
  Congress has raised the debt limit 79 times since 1960, and in just 4 
short months since the debt limit was last increased, over $700 billion 
has been added to our debt, since we took that action in August.
  Speaking of the debt limit, the Republican-backed balanced budget 
amendment will require a congressional supermajority to raise the debt 
ceiling. That means three-fifths of both Chambers will have to approve 
unless it is a time of war. That would require a majority in a time of 
war. That is a very important measure because we can't continue to 
increase the debt limit without addressing the underlying drivers of 
this fiscal crisis that faces our country.
  I also want to briefly touch on taxes. The Republican version of the 
balanced budget amendment, S. Res. 10, would require a supermajority to 
raise tax rates. We have a spending problem, not a revenue problem. 
Under S. Res. 10, a two-thirds approval of both Houses of Congress 
would be required for any bill ``that imposes a new tax or increases 
the statutory rate of any tax or the aggregate amount of revenue.''
  My friends on the other side of the aisle are proposing an 
alternative--S. Res. 24--to the balanced budget amendment that I have 
just described. While this proposal sounds good, it fails to squarely 
address the magnitude of the challenges we face. It doesn't apply to 
all spending. It also doesn't contain a cap on spending. It does 
nothing to strengthen our entitlement programs, and it does nothing to 
make it harder to raise taxes. It does nothing to make it more 
difficult to raise the debt ceiling. In my view, it is insufficient to 
be meaningful to pass along to the States for a vote.
  The Republican alternative contains the elements that I just talked 
about--a balanced budget, spending caps, a supermajority to raise 
taxes, and making it more difficult to raise the debt ceiling, unless 
and until we address the underlying causes of our fiscal crisis.
  This issue is deeply personal for me. I fundamentally believe all of 
us have a duty to make this country stronger than we found it. As the 
mother of two young children, Katherine, now 7, and Jacob, 4 years old, 
who are both very excited for Christmas, I want the American dream to 
burn as brightly for them as it has for me. It is not too late for our 
country or for this body to make the tough decisions that will put our 
country on a fiscally responsible path.
  I feel a solemn duty to make sure we make those choices now and that 
we don't continue to kick this can down the road to future generations 
and burden them with a debt they did not incur. The last thing I want 
is for my children to ask me: Mom, you knew we were going bankrupt. 
What did you do to save our country?
  Now is the time for courage. All of us recognize the enormity of the 
fiscal challenges we face, as well as the dire cost of continued 
inaction in this body. The Republican balanced budget amendment 
provides a solid foundation that will set our Nation on a fiscally 
responsible path. This is an urgent need that we have right now. We 
cannot do what we did in 1997 and fail to pass the balanced budget 
amendment. We should send this question to the States and let them 
decide, let the people of this country decide: Should we live within 
our means? Should we balance our budget? Should we deal with this debt 
crisis now and make sure our children and all children and our

[[Page 19800]]

grandchildren will have the same opportunities we have been blessed to 
have in the greatest country on Earth?
  I urge my colleagues to support S. Res. 10.
  The ACTING PRESIDENT pro tempore. The Senator from North Dakota.
  Mr. CONRAD. Madam President, I agree with the Senator from New 
Hampshire on some of what she said with respect to facing up to our 
deficit and debt. This debt does present a clear threat to our country, 
and it must be confronted. I agree with her entirely on the question of 
the importance of that and the priority of it.
  I disagree entirely with respect to this amendment that is before us. 
I came to the Senate floor to address this balanced budget amendment 
because I believe it would be a profound mistake for this country. In 
fact, I believe if this amendment were in force today we would be in a 
depression. I believe adopting this amendment would have and could have 
disastrous consequences for the economy and for the future strength of 
this Nation.
  I would like nothing more than to have a balanced budget. I believe 
in balanced budgets. I believe this debt represents a clear threat to 
the country. But I do not believe a constitutional amendment is the way 
to achieve it. I believe the way to achieve it is for us to make the 
decisions to balance the budget, to cut the spending, to raise the 
revenue, to actually balance the budget--not leave it to a 
constitutional amendment or to unelected judges or to the States but to 
make those decisions here and now.
  I have been part of the fiscal commission where 11 of 18 of us agreed 
to a plan to get our debt under control. I have also been a part of 
four Democrats and four Republicans who have produced a plan that would 
get us back on track.
  Here are the key provisions in the proposal before us. First, it 
would require the adoption of a balanced budget each year unless two-
thirds of the House and the Senate voted to waive the requirement.
  Second, it would cap spending at 18 percent of the prior year's gross 
domestic product, again, unless two-thirds of the House and the Senate 
voted to waive the requirement.
  We have not had a spending level of 18 percent of GDP in as long as I 
can remember. So that is a formula I think that goes against the 
reality of the needs of this country--not only the need for support for 
education but also for our national defense.
  It would prohibit passage of any bills that increased revenue unless 
two-thirds of the House and the Senate voted to waive the requirement. 
The Senator just showed a chart that showed revenue at the lowest level 
it has been in 60 years as a share of our national income. Again, 
revenue is the lowest it has been in 60 years. This constitutional 
amendment would say it would take a two-thirds vote to change it. 
Really? Revenue is the lowest in 60 years, and we are going to have a 
two-thirds vote to change it? Boy, that is a guarantee we are not going 
to have the necessary revenue to balance the budget anytime soon.
  It would require a three-fifths vote in the House and Senate to 
increase the debt limit.
  Here are what I see as the key problems with this proposal. First, 
most important, it would restrict our ability to respond to economic 
downturns. It would effectively block the implementation of 
countercyclical policies. This would only compound economic declines 
and possibly throw us into a recession or even into a depression.
  Two of the best known economists in this country did a review of what 
would have happened absent a Federal response after the events of late 
2008. Alan Blinder, former deputy head of the Federal Reserve, and Mark 
Zandi, the head of Moody's Economics, a former campaign adviser to John 
McCain, did an analysis of what would have happened in this economy 
absent the Federal response--the TARP and the stimulus. Their 
conclusion is that had we not had that Federal response, we would be in 
a depression today. We would have 16 percent unemployment. We would 
have 8 million more people unemployed.
  This amendment would have prevented that response. What a mistake, 
what a profound mistake. Further, this amendment uses Social Security 
funds to calculate balance and subjects the Social Security Program to 
the same cuts as other Federal spending. Further, it shifts ultimate 
decisions on budgeting to unelected and unaccountable judges.
  Finally, The State ratification process for a balanced budget 
amendment could take years to complete.
  We don't have years. We need to act now, and we don't need an excuse 
for inaction by saying: Oh, we passed a balanced budget amendment to 
the Constitution that will not take effect for God knows how long.
  Here are some additional problems that are specific to this proposal. 
The 18 percent of GDP spending cap is Draconian and unrealistic, 
particularly given the retirement of the baby boom generation and 
rising health care costs. The restriction on legislation that raises 
revenue would effectively prevent any increase in revenue, even if it 
is part of a bipartisan, balanced debt reduction plan.
  What a profound mistake that would be. Again, I repeat: Revenue as a 
share of our national income is the lowest it has been in 60 years. 
Spending as a share of our national income is the highest it has been 
in 60 years. So this proposal would absolutely handcuff us on the 
revenue side of the equation, locking in deficits for God knows how 
long. It doesn't make sense.
  Making it more difficult to raise the debt limit, this proposal 
increases the likelihood of default. We saw the turmoil created by our 
near default this summer. Why would we want to make an actual default 
far more likely to occur?
  We can also see that on our current course, by 2021, spending on 
Social Security, Defense and other nonhealth care spending and interest 
alone will reach more than 18 percent of GDP. What is missing? 
Medicare. If we stay on our current course, under this balanced budget 
amendment, Federal spending on Medicare would have to be completely 
eliminated. Let me repeat that. On our current course, by 2021, 
spending just on Social Security, Defense, nonhealth care spending, and 
interest alone will reach more than 18 percent of GDP. What is missing? 
Medicare. Medicare would have to be completely eliminated if we aren't 
to change what we are doing with Social Security, not to change what we 
are doing with Defense and other nonhealth care spending. Obviously, we 
can't do anything about the interest expense. That has to be paid.
  It is notable an 18-percent spending limit is so unrealistic that 
even the House Republican budget would violate this restriction in 
every single year. Let me repeat that. This 18-percent restriction on 
spending is so unrealistic that even the House Republican budget would 
violate this provision in each and every year of its life.
  Norman Ornstein, a respected scholar at the American Enterprise 
Institute--a Washington think tank--described a balanced budget 
amendment as a very dumb idea. In a column in Roll Call earlier this 
year, he wrote:

       Few ideas are more seductive on the surface and more 
     destructive in reality than a balanced budget amendment. Here 
     is why: Nearly all our states have balanced budget 
     requirements. That means when the economy slows, states are 
     forced to raise taxes or slash spending at just the wrong 
     time, providing a fiscal drag when what is needed is 
     countercyclical policy to stimulate the economy. In fact, the 
     fiscal drag from the states in 2009-2010 was barely countered 
     by the Federal stimulus plan. That meant the Federal stimulus 
     provided was nowhere near what was needed but far better than 
     doing nothing. Now imagine that scenario with a Federal drag 
     instead.

  Mr. Ornstein has it exactly right. A balanced budget amendment would 
have a devastating impact on our economy at the worst possible time. 
Mr. Ornstein is not alone in that sentiment. Macroeconomic Advisers, a 
leading economic forecaster firm, had this to say in a company blog 
posted in October:

       If actually enforced in fiscal year 2012, a balanced budget 
     amendment would quickly destroy millions of jobs while 
     creating enormous economic and social upheaval. The effect on 
     the economy would be catastrophic.


[[Page 19801]]


  Let me repeat that. The effect on the economy would be catastrophic.
  Continuing the quote:

       No model could capture the ensuing chaos and uncertainty, 
     which would make matters far worse.

  Macroeconomic Advisers went on to conclude that enforcing a balanced 
budget amendment in 2012 would result in 15 million fewer jobs.
  Let me repeat that: 15 million fewer jobs. That is largely in line 
with the Blinder and Zandi analysis of what would have happened absent 
the Federal response to the economic downturn.
  Here is what Bruce Bartlett, a former Reagan administration economic 
adviser, wrote in a New York Times online column in November:

       The idea of mandating a balanced budget through the 
     Constitution is dreadful. And the proposal that Republican 
     leaders plan to bring up is, frankly, nuts. The truth is that 
     Republicans don't care one whit about actually balancing the 
     budget. If they did, they would want to return to the 
     policies that gave us balanced budgets in the late 1990s. Of 
     course, no Republican favors such policies today. They prefer 
     to delude voters with pie-in-the-sky promises that amending 
     the Constitution will painlessly solve all our budget 
     problems.

  We must absolutely address the Nation's deficit and debt. Our friends 
on the other side have that exactly right. Our economic future depends 
on our ability to put the budget back on a sound long-term path. That 
is why I believe what is actually needed is for us to put our energy 
and effort into writing a budget that actually balances, cutting the 
spending, raising the revenue, making the tough choices. That is the 
best way forward.
  A balanced budget amendment to the Constitution is not the answer, 
and this balanced budget amendment is particularly troubled. It would 
restrict our ability to respond to economic downturns, it would impose 
a Draconian and unrealistic spending cap, and it would effectively 
prevent any increase in revenue, even if it is part of a bipartisan 
balanced deficit reduction plan.
  I urge my colleagues to reject this amendment.
  On a separate matter, let me just say when my colleague said we don't 
have a budget, we do have a budget. I sometimes think our colleagues 
missed out on what happened on August 2. We passed the Budget Control 
Act. The Budget Control Act provided a budget for this year and for 
next year. That is the budget we are operating under. It was passed in 
the Budget Control Act on August 2.
  So when they put up these signs that say we haven't had a budget for 
958 days or 858 days, that is not right. We do have a budget. They may 
not particularly like the budget. They certainly may not like the way 
it was done because it wasn't done through the regular process. It 
wasn't done as a budget resolution. It was done as a law. Budget 
resolutions are not signed by the President of the United States; they 
are purely a congressional document. The Budget Control Act is actually 
a law. It imposed a budget for this year and next year and 10 years of 
spending caps. That is the law of the United States. That is a budget.
  For my colleagues to stand and say we don't have a budget, it almost 
makes me wonder, did they miss out on the debate and the passage and 
the signing of the Budget Control Act? I tell my colleagues, that is 
our budget. It is in law. It is not just a resolution, it is the law of 
the land.
  I thank the Chair, and I yield the floor.
  The PRESIDING OFFICER (Mr. Blumenthal). The Senator from Utah.
  Mr. HATCH. Mr. President, I have listened with a great deal of 
interest to my good friend and colleague, and I do care a great deal 
for him. He has been budget chairman for quite a while. Frankly, he has 
been a lone voice over on that side, trying to get all of us to live 
within our means. I have great respect for him for at least trying.
  But we call budgets line-by-line discussions of just exactly what are 
the inflows and outgoes as determined by the Budget Committees. He 
hasn't been able to pass a budget mainly because he can't get his side 
together to do it. It is a disgrace not for him but because our 
colleagues will not do it. Nobody wants to do that because if they 
truly had a budget, that would mean we would have to get spending under 
control. We can't just keep doing it by adding taxes. We have a low 
rate of income coming in right now mainly because spending is 
completely out of whack.
  I listened to my colleague very carefully. I have to say he made a 
tremendous case for the constitutional balanced budget amendment 
because he kept going on and on about all the problems we have. He 
didn't mention we have been spending 25 percent of the GDP. Usually, 
that is around 20 percent. So 25 percent is a whopping amount of money. 
Our former CBO Director said: I guess the new normal will be somewhere 
around 23 percent. We have been spending around 20 percent, while the 
revenues are around 18 percent. Now they are spending 25 percent of our 
GDP.
  If there was ever an argument as to why we need some restraint in the 
Congress of the United States, it is, No. 1, they can't get a budget 
over there. We have a darned tough enough time over here when we are in 
charge. No. 2, we are spending this country blind. I think the 
distinguished Senator made that case eloquently. I think it is both 
parties too. But there is certainly one party that is much more used to 
spending than the other--I have to say that--and it is not the 
Republican Party.
  Look, all I heard in this last dissertation was what a rough road to 
hoe our country has. This amendment allows for 5 years to gradually 
reach a point where we can live with a balanced budget constitutional 
amendment. What it does is send a message to everybody in this body and 
the other body, over in the House of Representatives, that the game is 
over. We better get it in shape in 5 years. Some people don't think we 
can do it in 5 years. I am not so sure we can, but we have to try.
  Let me tell you, this country is in real trouble. My distinguished 
colleague and friend, whom I admire greatly because he does tell it the 
way it is--though sometimes has his own interpretation as to the way it 
is--made a pretty darned good case that we are out of control. I have 
only been here 35 years, but I have to say I haven't seen many days 
where we have even come close to a balanced budget, and I have seen 
spending after spending after spending and demands for taxes so they 
can spend more. Both sides are at fault, in my opinion, but one side 
much more than the other.
  I just wanted to make these points, because, my gosh, he made a great 
case for the balanced budget constitutional amendment. Frankly, I don't 
see how anybody listening would say the current way we are doing things 
is the right way to do it. Yes, this amendment would put constraints on 
Congress, and they would be tough constraints, but don't buy this 
argument there is no way we can raise revenue or no way we can spend 
under certain circumstances.
  It is just that you have to have a supermajority vote to do it, and 
you are going to have to make a case for it for the first time, in my 
time here, I will tell you that.
  I don't think anybody in this country thinks Congress is doing what 
is right with regard to raising taxes and spending. I have to say that 
I have watched it for all these years I have been in the Congress, and 
it is not working because we don't have the constraints that make us 
have to make it work. That is what this balanced budget amendment is 
all about.
  What they offer as a balanced budget amendment wouldn't put 
constraints on anything. It is just there so they can have something to 
vote for so they can say they voted for a balanced budget amendment. It 
is anything but a balanced budget amendment.
  Ms. COLLINS. Mr. President, I rise today to talk about the urgent 
need for our government to begin living within our Nation's means. We 
face a very grave fiscal crisis, one that threatens America today and 
the American dream for future generations. It demands that we get our 
Nation's fiscal

[[Page 19802]]

house in order. So I am pleased the Senate is now debating a balanced 
budget amendment to our Constitution.
  In February 1997, a month after I came to the Senate, I went to the 
Senate floor to urge my colleagues to pass a balanced budget amendment 
to the Constitution to prevent our growing debt from swallowing our 
future prosperity. Unfortunately, that effort came up one vote short. 
Since that time, our national debt has ballooned to an astonishing 
$15.1 trillion.
  Sometimes when we deal with large numbers, it is easy to lose sense 
of what they mean and difficult to put them into context. What $15.1 
trillion in debt means is that a child born today will automatically 
inherit a debt burden of more than $48,000. That debt has been largely 
accrued not for that child's benefit but for our own. It is difficult 
to imagine a more egregious example of taxation without representation 
than forcing our children and grandchildren to bear the future tax 
burden for today's excesses.
  Unfortunately, as we have seen over the last decade, the addiction to 
budget deficits is not simply a Democratic or Republican problem. Both 
parties have had a difficult time showing restraint when it comes to 
spending. We have had Gramm-Rudman-Hollings, the Deficit Reduction Act, 
and the Budget Enforcement Act, and yet deficits not only persist but 
have grown larger. The fiscal year that ended on September 30 marked 
the third consecutive year in which the United States has run deficits 
in excess of $1 trillion. Deficits have become a part of the way that 
Washington does business. Spend now and let someone else deal with the 
consequences later.
  Those spendthrift ways are catching up with us. Our skyrocketing debt 
has become a drag on our economy and a threat to our future prosperity. 
We simply do not have the luxury of putting off difficult decisions. We 
are consistently spending more than we take in, and by a large margin. 
In the last fiscal year, government outlays totaled 24.1 percent of 
gross domestic product--the second highest level, after 2009, since 
World War II. Despite the very serious warning signs that we are on the 
wrong fiscal course, this marks the second consecutive year that the 
Senate has not even bothered to pass a budget resolution.
  It is progress that the Budget Control Act that passed last summer 
includes caps on discretionary spending, and I have worked very hard 
with my colleagues on the Appropriations Committee to put together 
responsible and thoughtful spending bills that live within those caps. 
But, as my colleagues know, the biggest driver of our long-term debt 
and deficits is not discretionary spending but the mandatory spending 
that continues to balloon on autopilot.
  Like many of my colleagues, I had hoped that the so-called 
supercommittee, which was created by the Budget Control Act, would be 
able to reach bipartisan agreement to reform mandatory spending and 
change our fiscal trajectory. Unfortunately, that bipartisan agreement 
remains elusive as both parties failed to come up with a deficit 
reduction plan that was capable of winning a simple majority of panel 
members. Instead, we have automatic spending cuts that are set to kick 
in, which could have very serious consequences for our national 
defense. Again, Congress has avoided making difficult choices about our 
national priorities.
  The events currently unfolding across the Atlantic, with European 
leaders scrambling to stop the debt contagion that threatens the 
economic prosperity of the continent, should be a clear warning signal 
to us of what could come if we do not stem the tide of red ink that is 
engulfing our Nation. We must put in place structural reforms that will 
permanently force Washington to align expenditures and revenues.
  Every day when I enter my office building, I am reminded of the 
famous quote attributed to its namesake, Senator Everett Dirksen. The 
wry observation he offered some four decades ago--``A billion here, a 
billion there, and pretty soon you're talking about real money''--seems 
tragically quaint today. I am convinced, now more than ever, that a 
balanced budget constitutional amendment is what is needed to address 
our growing debt and deficits.
  Mr. McCAIN. Mr. President, I come to the floor today to discuss my 
support of S.J. Res. 10, which would require a balanced budget 
amendment to the Constitution. Let me start off by saying that we need 
this amendment to protect the American taxpayer and bring back fiscal 
discipline to Congress. We need this amendment not because the American 
taxpayer is taxed too little, it is because Washington in particular, 
Congress--spends too much. Finally, we need this amendment to show the 
American taxpayer that we are serious about eliminating waste, fraud, 
abuse, and duplication from the Federal budget and are serious about 
putting our country back on a path to prosperity, not bankruptcy.
  The Nation's debt now stands at the unsustainable level of $15.1 
trillion. The Federal Government is borrowing 40 cents of every dollar 
spent. According to the CBO, by 2021 debt held by the public will reach 
82 percent of GDP. Without real and meaningful action by Congress to 
reform the way we do business, the Nation's debt will balloon to well 
over 100 percent by 2035. CBO projects that the cost of simply paying 
the interest on all of this debt will total $4.5 trillion over the next 
decade. And we wonder why there is so much uncertainty in our economy, 
why businesses are not expanding and creating jobs that we so 
desperately need, why the approval rating of Congress is at alltime 
lows--and, may I add, justifiably. The writing is on the wall, and that 
writing says that Congress can no longer allow politics and special 
interests to direct how hard-earned taxpayer dollars are spent. We must 
make hard choices now and live within our means as every American 
family is required to do.
  The President has said that we do not need a balanced budget 
amendment to the Constitution to cut spending and balance the budget. 
While that may be true, it is not the reality. When the Senate passed a 
balanced budget amendment in 1982, the national debt was $1.1 trillion. 
In 1997, when the Senate failed by one vote to pass a balanced budget 
amendment, the national debt was over $5 trillion. Today, it is over 
$15 trillion. Unfortunately, Congress has proven time and time again 
that they are unable to cut spending and must be required by law to do 
so. S.J. Res 10 is a strong, meaningful, and commonsense balanced 
budget amendment that will reassure financial markets and the American 
people, therefore, providing confidence that our economy so desperately 
needs.
  First and foremost this constitutional amendment will require the 
President to lead by example and submit a balanced budget to Congress. 
Since being elected, President Obama has failed to send a balanced 
budget to Congress for consideration.
  S.J. Res. 10 would also require Congress to pass a balanced budget 
that limits outlays to 18 percent of GDP. In addition, it would require 
a vote of two-thirds of both Houses of Congress in order to raise taxes 
on the American people. This provision is vitally important to ensure 
that we are not punishing the American taxpayer by making them pay for 
out of control spending by Washington. Finally, S.J. Res. 10 would 
require a vote of three-fifths of both Houses of Congress to increase 
the Nation's debt limit. This constitutional amendment also includes 
limited waivers that would, for example, allow Congress during a 
declaring of war to enact deficit spending or to raise the debt limit 
by a simple majority vote.
  My colleagues on the other side have brought forth their own balanced 
budget amendment; however, their proposal fails to ensure that Congress 
will make the hard choices necessary to solve our current and long-term 
fiscal crisis. For example, the Democrats' balanced budget amendment 
does not apply to Social Security spending. According to the 2011 
report by the Social Security Trustees, Social Security faces permanent 
deficits unless the Congress reforms the system. In fact, the program

[[Page 19803]]

is projected to face a deficit of $46 billion this year. The Social 
Security disability trust fund is projected to become insolvent in 
2018. We cannot be serious about solving our Nation's financial 
problems unless we include the Social Security Program, which is one of 
the largest drivers of future debt. In addition, their balanced budget 
amendment does not cap spending at 18 percent of GDP, it does not 
require a supermajority of Congress to raise taxes and does not require 
a supermajority of Congress to raise the debt limit. As we know too 
well, Congress has never voted against raising the debt limit.
  This week, the Senate has the ability to show the American people 
that they are serious about fixing our fiscal crisis by adopting this 
balanced budget amendment to the Constitution. This balanced budget 
amendment is a vital step in ensuring that future generations will have 
the same opportunities that all of us here in this body have 
experienced. I urge my colleagues to support S.J. Res. 10.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Georgia.
  Mr. ISAKSON. Mr. President, I see the distinguished majority whip on 
the floor. I would like to propound a UC, and if he disagrees, please 
tell me. I would like to be recognized for 5 minutes, followed by 
Senator Shaheen from New Hampshire for 5 minutes, followed by Senator 
Enzi for 5 minutes.
  The PRESIDING OFFICER. Is there objection?
  Mr. DURBIN. Reserving the right to object, I would just like to add 
my name at the end of the queue for at least 5 minutes.
  Mr. ISAKSON. With no objection from me.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ISAKSON. Mr. President, I appreciate the time.
  I first thank Senator Hatch from Utah for 16 continuous years of work 
on the balanced budget amendment. It was his fight in 1995 that brought 
that amendment to the floor within one vote of passing in the Senate, 
and it is his fight today to bring it back for another vote.
  I have listened to a substantial number of the speeches, and I come 
back to three points.
  Facts are stubborn, and there are three facts: First, we are spending 
too much; second fact, we are promising too much to our people; and 
third fact, we are borrowing too much.
  I ran a real estate company for 22 years. Real estate is all about 
borrowing and leverage, but you learn a lesson in real estate and you 
learn it very painfully. There is such a thing as good leverage and 
there is such a thing as too much leverage, and our country is at the 
breaking point on leverage.
  We have a process problem in the Senate and the House. We can't deal 
with our financial fiscal affairs, our promises to our people or our 
borrowing, and it is time we change the paradigm.
  I support a balanced budget amendment because if it is ratified by 
three-fourths of the States and becomes a part of the Constitution, it 
forces the Congress to just say no on spending when we are spending too 
much, it forces the Congress to look at entitlements and recognize that 
we can only promise that which we can afford, and it forces us to look 
at debt and recognize when we are in too much debt and we have become 
overleveraged.
  I want to put in a plug for something Senator Shaheen and I have been 
working on for a long time, and it is a fundamental process change 
called a biennial budget where you appropriate in odd-numbered years 
for 2 years, not 1, and you spend that even-numbered year, the election 
year, overseeing your expenditures and your programs to find savings, 
to find waste, and to try to balance your budget. If we changed our 
process and forced ourselves to do something like that, we wouldn't be 
facing the catastrophic consequences we are today.
  I thank the Senator from New Hampshire for being on the floor and 
recognize her for her leadership on the issue, also, as one from a 
State that does biennial budgeting, as do 20 of the 50 States in the 
United States of America.
  I will tell you an interesting story about biennial budgeting. The 
nation of Israel got in financial difficulty 4 years ago. They were 
borrowing too much, they were spending too much, and they were going in 
debt too much. Israel asked around the world: What should we do to 
change our fundamental process? And they changed to a biennial budget. 
Two years later, their GDP was better, their deficit ratio was down, 
and GDP had gone up about 7.5 percent in 2 years, all because they got 
their fiscal house in order.
  So while some will argue that you can't do a balanced budget because 
it won't work, some will say 18 percent is too much, some will say you 
just can't do this and you just can't do that, there is one thing we 
can't do anymore; that is, spend beyond our means, borrow beyond what 
is good for our children and grandchildren, and promise to our seniors 
and those in poverty that we can deliver more than we can deliver.
  If we face the day of reckoning now and we reprioritize our 
entitlements, if we put our Tax Code on the table and reform it and we 
cut spending where we can, we can come up with a trifecta that will 
take this debate to ancient history, and we will begin getting the 
United States of America back in good fiscal soundness. That is what a 
balanced budget amendment starts, and I hope the end of it is that 
process and a biennial budget as well.
  I thank the President for the time, and I yield to the Senator from 
New Hampshire.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mrs. SHAHEEN. Mr. President, I thank my colleague from Georgia for 
his very thoughtful comments.
  Senator Isakson has been working on a biennial budget for a very long 
time. I was pleased to join him in this session of Congress. And I 
agree with him. I believe this is one of the ways we can encourage more 
oversight of our spending and hopefully address some of the budget 
issues we face. So I appreciate and share his beliefs that this is an 
important change we should make.
  I am actually on the floor not to speak on the balanced budget 
amendment, however, but to talk about what I believe is very important 
for us to do before the end of this year; that is, address the 
extension of the payroll tax cut.
  In November, the private sector added 140,000 new jobs to our 
workforce. In fact, businesses have now created 100,000 jobs in each of 
the last 5 months. This is a positive trend we haven't seen in the past 
5 years. While this is encouraging, we still have a long way to go 
because more than 13 million Americans remain unemployed and millions 
more are underemployed. These individuals and their families are 
struggling to make ends meet during this holiday season.
  At this time last year, Congress passed bipartisan legislation to put 
more money into the pockets of working Americans. We cut payroll taxes 
for workers--an effort that increased take-home pay for the average 
household by almost $1,000 in 2011. This tax cut isn't just good for 
families on a tight budget, it is good for our fragile economy. In New 
Hampshire, the payroll tax cut has meant an extra $600 million in our 
communities.
  There are some who want to allow this tax cut to expire at the end of 
the year. But let's be clear. If the tax cut expires, this would mean 
the average family would see their taxes increase by $1,000 next year. 
This would mean taking $120 billion out of our Nation's economy, money 
that would no longer be spent at our supermarkets, at our retailers, 
and at our gas stations. That doesn't make sense.
  Independent economists have predicted that allowing this tax cut to 
expire could cost our economy 400,000 jobs next year. Some have even 
predicted that the United States could face another recession if we 
don't take action.
  Members of this body have also suggested that this tax cut would 
starve Social Security of needed revenue and endanger this bedrock 
program's solvency. With Americans relying so

[[Page 19804]]

heavily on Social Security to meet basic needs, this is a serious 
charge and one we should take seriously. However, the program's Chief 
Actuary has written that this tax cut does not hurt Social Security's 
finances. Instead, this proposal contains provisions to require that 
the Social Security trust fund be made whole.
  I recently supported Senator Casey's proposal to not only extend 
payroll tax cuts for employees but also to expand them to increase the 
average family's take-home pay by an additional $500 next year. This 
proposal would have cut employer payroll taxes, making it easier for 
small businesses to keep current workers and hire new ones. That 
proposal was fully paid for with a 3-percent tax on people earning more 
than $1 million in a year. Because of the way it was paid for, the 
legislation was blocked. My friend from Pennsylvania, Senator Casey, 
also introduced a compromise plan that I supported. But again, 
unfortunately, it did not pass.
  I think that particularly now, at this time of the year, at this 
critical stage for our economy, everyone should agree on preventing tax 
increases for working families. There are some competing ideas about 
the best way to accomplish this, and I welcome that debate, but 
Congress simply cannot afford to saddle middle-class families with a 
$1,000 tax increase in the midst of an uneven recovery. It isn't right 
for our small businesses, it isn't right for our communities, and it 
isn't right for the economy.
  Time is running out to extend the payroll tax cut. I urge my 
colleagues to support this effort.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. ENZI. Mr. President, I rise today to discuss the issue I raised 
during my maiden speech on the Senate floor in 1997; that is, the need 
to pass a constitutional amendment requiring a balanced budget.
  I am disappointed that we were unable to pass a balanced budget 
amendment in 1997. I commend Senator Hatch for his efforts then. We got 
within one vote. We had 66 votes and we needed 67. Had we gotten that, 
we wouldn't be in this mess today. In 1997, our national debt was $5.4 
trillion. Today, it is an astonishing $15 trillion. Without immediate 
action, that number will continue to increase to a level that is even 
more unsustainable.
  Time and time again, the Federal Government has proven it is 
incapable of the fiscal discipline needed to spend within its means. 
Time and time again, the Federal Government has spent more money than 
we brought in. It has led to the situation we currently face where we 
are borrowing more than 40 cents on every dollar we spend and where we 
are being threatened with further downgrades in our credit rating.
  In fiscal year 2010, the government brought in slightly more than 
$2.2 trillion in revenue. At the same time we collected $2.2 trillion, 
we spent $3.5 trillion. In other words, we overspent by $1.3 trillion. 
That is $1,300 billion. That is an astonishing amount of spending, and 
it cannot be sustained. I encourage everybody to write these numbers 
out with all of the zeroes sometime and see what we are talking about. 
We have a spending addiction that must be controlled. For years we have 
tried to hide it, disguise it, or ignore it. We have acted as if it is 
OK to keep spending money we don't have. We no longer have that option. 
The world today is different from the world of 1997.
  We have seen riots in other nations where their fiscal situations 
were out of control. If we don't act now, we could see similar events 
in this country. We can either balance our budget or go broke--even 
more broke than we already are.
  Balancing the budget is not a revolutionary idea. Responsible 
families balance the amount they spend with the amount they make or 
they go bankrupt. Businesses balance the amount they spend with the 
amount they bring in or they go bankrupt. Most States have amendments 
requiring them to balance the amount they spend with their revenue. 
Wyoming's Constitution requires a balanced budget each and every year, 
and they do it. If people in Washington understood budgeting the way 
Wyoming does, we would be in a much better place right now. If 
families, businesses, and States can balance their budgets, there is no 
reason the Federal Government cannot balance its budget.
  There are two options the Senate is considering today, and I am 
pleased there is consensus from both sides of the aisle that a balanced 
budget amendment would help us. Although that is the case, there is no 
doubt in my mind that the version introduced by Senator Hatch is far 
superior to the version introduced by Senator Udall.
  The Republican balanced budget amendment gets to the heart of the 
problem, which is the need to rein in out-of-control spending. The 
Republican resolution requires that we get spending down to historical 
revenue levels and forces us to make the tough choices about which 
programs will no longer be necessary. It also prohibits Congress from 
raising taxes until a supermajority of Members support such a tax 
increase. This is an important provision because the default solution 
for our out-of-control spending should be cutting spending, not raising 
taxes. This bill also goes into effect 5 years after ratification, 
which gives us the ability to transition to a balanced budget.
  I have a penny solution bill out there, a 1-cent solution where we 
cut 1 percent from every dollar we spend for 7 years. At the end of 7 
years, the budget would balance. So it is not something that is 
undoable. We can balance the budget.
  While I am pleased that my Democratic colleagues have a balanced 
budget amendment, the alternative they offer does not address the heart 
of the problem. It does not include a spending cap to ensure that we 
move spending to an acceptable level. It does not include a requirement 
for a supermajority to raise taxes, which will allow proponents of tax 
increases to more easily work to balance a budget on the backs of the 
American taxpayers. And the American taxpayers are only 49 percent of 
the people working right now. The American people are not the ones who 
cannot get spending under control. They should not see tax increases 
simply because Congress can't do its job.
  We need to pass the Hatch amendment, and we need to pass it now, 
because I must also remind my colleagues that passage of a strong 
balanced budget amendment is the first step. If we pass a balanced 
budget amendment, it still must be ratified by the States. Three-
fourths of the States have to pass it for it to become a part of the 
Constitution. That will take time, and with a $15 trillion debt we 
don't have a lot of time left. There is speculation that 2 years might 
be the outside. This isn't going to balance for 5 years. Two will 
create some substantial cuts and tax increases.
  Passage of the balanced budget amendment by three-fourths of the 
States is a tough test. Because of the magnitude of what we are trying 
to do, it should be. However, we need to give the States this 
opportunity to force the Federal Government to come to grips with its 
finances, as the State governments are required to do.
  Why should we give the States the opportunity to ratify a balanced 
budget amendment? Because I found that the best decisions are made 
closest to the people. State governments are closer to the people than 
the Federal Government and they are generally better at addressing the 
needs of the people of their State. Giving the States the opportunity 
to ratify the amendment will bring the budget closer to the people and 
would allow the American people to decide how they want Washington to 
spend their hard-earned money. Most of the American people get it and 
they are asking us to get it and do a balanced budget amendment.
  Amending our Constitution is an extraordinary measure. It is not 
something I take lightly. We are in an extraordinary time. We have a 
budget deficit that is out of control and a national debt that is 
ballooning to levels that are unsustainable. We need a balanced budget 
amendment so we can begin to get our Nation's finances back in order.

[[Page 19805]]

  I commend Senator Hatch for his bill and appreciate him offering it. 
I hope my colleagues will support it. It is essential for our country.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. DURBIN. Mr. President, there are very few things on which Members 
of Congress agree, but one of the things that binds us and unites us is 
the common oath we take to uphold and defend this document. This 
document is not just another resolution, another law; it is the 
Constitution of the United States. For more than 220 years this 
document has guided our Nation and inspired other nations toward 
democracy. I think it is fitting that we swear an oath to uphold and 
defend it.
  But I think we also have to look at this document not just with 
respect but with humility, humility because we know the words contained 
have managed to guide our Nation so successfully for so many decades 
and centuries. Those who are bold enough to suggest they would change 
the wording of this document have to expect to have hard questions 
asked as to whether it is appropriate and whether what they are setting 
out to do is consistent with this great document and the needs of our 
Nation.
  I can recall when Senator Hatch chaired the Senate Judiciary 
Committee and I was a member. There was a day when they asked me, as a 
member of the Judiciary Committee, to give permission for three 
constitutional amendments to be considered in the same day. I objected, 
which was my right. I said to Chairman Hatch at the time: You can call 
two constitutional amendments on Thursday but, call me old-fashioned, I 
don't think we ought to amend the Constitution more than twice a day. 
The point I was trying to make was to suggest to my colleagues to at 
least have some humility and maybe even hesitancy to suggest they can 
change for the better the wording of this great Constitution.
  It has been changed, there is no question about it. From the moment 
it was written until a few years later, Thomas Jefferson called for the 
Bill of Rights. Many say that was essential for the ratification of the 
Constitution. It included some basic rights that we now revere in this 
country. So the first package of amendments, the Bill of Rights, has 
become an integral part of the original document because they were 
adopted so quickly--added so quickly.
  But in the 220 years since 1791, when the Bill of Rights was added--
in the 220 years we have only amended this document 17 times and only 
for the most serious of matters. Consider what our amendments have 
done. They have ended the practice of slavery. They have established 
the principle of equal protection. They have assured the right of women 
in America to vote, among other things. They have provided for 
succession in case of Presidential disability, and they have addressed 
some of the most fundamental issues facing our Nation.
  Now some Members of Congress believe we should enshrine in our 
Constitution their views of what the Federal budget should look like. 
They want to radically reshape our constitutional framework in order to 
relieve Congress of its political and moral responsibility to make 
tough choices about taxing and spending. They want to tie the hands of 
Congress on budget decisions and pass important decisions on to another 
branch of government, our Federal judiciary.
  That is not what the Founding Fathers intended. The Constitution 
gives the power of the purse expressly to Congress. Fulfilling this 
constitutional duty carries some political risk, but we all signed up 
for that job. Members of Congress should not try to change the 
Constitution to avoid their duty to make tough and important decisions.
  These days, some in Congress would rather take a red pen to the 
Constitution than to reconsider an anti-tax pledge they have made to a 
Washington lobbyist named Grover Norquist. Mr. President, 40 Republican 
Senators, all of whom are cosponsors of this amendment, have taken a 
pledge, a public oath to Grover Norquist when it comes to the issue of 
taxes. I believe my colleagues who are indentured politically to Grover 
Norquist need to get their priorities right. Our oath to support and 
defend the Constitution is much more important than any allegiance to 
any Washington lobbyist.
  Congress has balanced the budget not just in my lifetime but in my 
term of service. We ran a budget surplus in fiscal years 1998 through 
2001. There is nothing stopping us now from getting our fiscal house in 
order except a lack of political will. We simply do not need to go to 
the extreme of amending the Constitution to get this job done.
  It is also clear a balanced budget amendment proposal has many 
unanswered questions and concerns and it is our responsibility to ask 
those questions. I held a hearing as chairman of the Constitution 
Subcommittee of the Judiciary, well attended by Members on both sides 
of the aisle, with witnesses telling us the pros and cons of a balanced 
budget amendment. That is the way the process should work. Now we come 
to the floor to consider two versions of a balanced budget amendment.
  It is interesting, when the balanced budget amendment came before the 
House of Representatives, opposition to it was bipartisan. Even the 
Republican chairmen of the House Rules Committee and the House Budget 
Committee voted against the Republican version of the balanced budget 
amendment brought up in the House.
  A few weeks ago, when we held this hearing, witnesses told us why we 
should have pause, if not reject, this notion of a balanced budget 
amendment. First, it would cause harm to the economy. I cannot say it 
any better than Senator Conrad did moments ago. Our budget in 
Washington is designed to not only serve the needs of the nation but to 
help our economy get on track and stay on track. In fact, when things 
go bad in our economy, as they have in the last several years, our 
budget steps in with countercyclical measures such as unemployment 
compensation to put our economy back on track. The balanced budget 
amendment before us today is going to make that more difficult to do.
  The forecasting firm Macroeconomic Advisers told us what would have 
happened with this balanced budget amendment if it had been in place 
today. They said such an amendment would double the unemployment rate 
in America, cause the gross domestic product to shrink by 17 percent, 
and destroy millions of jobs. That is something my Republican 
colleagues will not acknowledge, and they should. If we cannot spend in 
times of recession, even when receipts are low, we fail to turn the 
recession around and of course we leave many unemployed Americans with 
no help when they desperately need it.
  There is also a provision in the Hatch-McConnell balanced budget 
amendment that would increase the risk of default on our national debt 
by requiring a three-fifths vote in each House to raise the debt limit. 
I might tell my colleagues who follow this, only 3 of the last 11 debt 
ceiling increases passed both Chambers by a three-fifths vote; 3 of the 
last 11. If you enjoyed the debt limit standoff of a few months ago and 
the threat of not only closing down our Government but closing down our 
economy, you would enshrine it in the Constitution with the Republican 
balanced budget amendment.
  It always strikes me as odd, if not hypocritical, that Members come 
to the floor and give speeches about how much they support a war 
effort, or spending for a given issue, and then when it comes time to 
raise the debt limit, which is part of the bargain, they are nowhere to 
be found. They want to be there for the press release saying, I am for 
the war, but when the debt limit needs to be increased to pay for the 
war they become fiscal conservatives and are nowhere to be found. I 
think there is some political hypocrisy in that.
  Another concern no one has answered that I commend to my colleagues 
was exemplified by the testimony of Professor Alan Morrison of George 
Washington University Law School. He asked the basic question: Who is 
going to enforce this amendment? If in fact

[[Page 19806]]

Congress does something in violation of the amendment, who can sue? And 
which court would consider it? It is a valid question because 
ultimately this will end up in the courts. The courts will have to make 
some rather unique decisions. What are the outlays and receipts of the 
United States? What was the gross domestic product? These are issues 
which many in the court may find challenging if not impossible to deal 
with on a timely basis. The longer it takes to resolve those issues the 
more uncertainty there will be about our Nation's economy and its 
economic future.
  Do we want to put the courts in charge of budget decisions? Former 
Solicitor General and Judge Robert Bork said ``the result . . . would 
likely be hundreds, if not thousands, of lawsuits around the country, 
many of them on inconsistent theories and providing inconsistent 
results.''
  Those who support the amendment look for stability and certainty. My 
guarantee is turning this over to the Federal courts will give you 
neither.
  The nonpartisan Congressional Research Service looked at balanced 
budget amendment enforcement on August 3 and said:

       The experience of State governments indicates that concern 
     over judicial involvement in budgeting is realistic. In some 
     States the judiciary has become involved with the operation 
     of various aspects of budgeting to impose budget balancing 
     remedies [like] requiring tax increases, limiting 
     expenditures generally or preventing implementation of 
     specific spending laws. The possibility that the Federal 
     courts could invoke such remedies prompts concern about the 
     potential such actions would have for causing a significant 
     shift in the balance of power among the branches of the 
     Federal Government.

  Even former CBO Director Douglas Holtz-Eakin, who was called in by my 
Republican colleagues to testify at our hearing in support, conceded 
``the question of enforcement remains a challenge that should be 
thoughtfully considered.''
  I might add, parenthetically: No kidding. Enforcement of this is 
critical. How can the Senate consider passing a balanced budget 
amendment without answering first the question of enforcement? It would 
create tremendous uncertainty.
  I would say the balanced budget amendment that has been sponsored by 
all the Senate Republicans raises particular concerns. Under this 
proposal, spending would be capped at 18 percent of gross domestic 
product each year, a level far below the Draconian budget suggested by 
Congressman Paul Ryan that would end Medicare as we know it.
  The Senate Republican proposal enshrines the Republican philosophy in 
requiring a two-thirds vote in each House on any bill that increases 
taxes or revenue without any ability to waive that two-thirds 
requirement, even in time of war.
  The effect of these reforms would devastate programs such as Medicare 
and Social Security while giving constitutional protection to tax 
expenditures currently enjoyed by corporations and the wealthy. This 
proposal is not sensible, it is not fair, it would not serve our 
country well.
  In short, our hearing made it clear there has not been a balanced 
budget amendment proposed that would actually be enforceable and that 
would not cause great collateral damage to the economy.
  I have served on several efforts, and continue to, in an effort to 
reduce spending, to find new revenue, and to balance our budget. I will 
tell you that it takes political will. This kind of approach, this idea 
that somehow we can pass a constitutional amendment and be done with 
our responsibility is not only shortsighted, I think it is 
counterproductive. I think it will make our situation worse instead of 
better. I thank Senator Mark Udall for his offering on his balanced 
budget amendment. It is a better approach, and while I don't support a 
balanced budget amendment, if I were to support any balanced budget 
amendment it would be the Udall amendment. But I don't believe amending 
the Constitution at this point in time is the right way to approach 
this. I do not believe either amendment achieves it without creating 
terrific uncertainty in our future about enforcement.
  I urge my colleagues to oppose efforts to amend our Constitution. I 
urge them, instead, to show political courage and work hard right now 
in a bipartisan way to address our fiscal challenges. That is what the 
American people expect of us.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. KYL. Mr. President, I want to express my support for the 
Republican-offered balanced budget amendment, a measure I worked on 
with Senators Toomey, Lee, Hatch, and Cornyn, and thank those Senators 
for their leadership on the issue.
  As Americans know, Washington has a spending problem. The Federal 
Government's fiscal position is unsustainable. It now borrows more than 
40 cents of every dollar it spends. Indeed, our debt has climbed to 
over $15 trillion and will continue to grow and threaten our economy 
and our jobs and our way of life unless we do something about it.
  Opponents say Congress should do its job. Sure, it should, but it has 
not. Events during the last 30 years have shown that Congress cannot be 
counted on to make the tough choices necessary to control spending and 
to balance the budget. Here is a little history. When the Senate passed 
a balanced budget amendment in 1982, that national debt was $1.1 
trillion. In 1986, when the Senate failed by one vote to pass the 
balanced budget amendment, the national debt topped $2.1 trillion. By 
1997, when the Senate again failed by one vote, the national debt was 
over $5 trillion. Today the debt is over $15 trillion. So there is no 
evidence that Congress has been willing to or able to reduce the debt 
without the Constitution requiring it.
  The Republican balanced budget amendment simply requires Congress to 
do its job. It includes real reforms that would help the government 
live within its means, including having the President submit a balanced 
budget to Congress every year.
  The balanced budget amendment does not etch rules into stone. Any of 
its requirements can be waived by a supermajority of the Congress; that 
is, if there is a real national consensus to do so. Let's remember we 
are in a crisis today because of deficit spending. Raising taxes and 
getting deeper in debt have been far too easy for Congress.
  The Republican balanced budget amendment contains two key enforcement 
mechanisms that Congress would have to abide by. First, Congress would 
have to limit spending to 18 percent of the gross domestic product from 
the preceding calendar year. The balanced budget amendment would also 
prohibit spending from exceeding total revenues in a given year. Why 18 
percent? Well, if the goal is to balance the budget, the only way to 
succeed is to limit the Federal spending to the level of revenue that 
the economy is willing to bear.
  According to the Congressional Budget Office's August Budget and 
Economic Outlook, from 1991 to 2010--the most recent period of time--
revenues averaged 18 percent of gross domestic product, and that is why 
that number is selected.
  It is notable that the Democratic alternative does not contain a 
spending cap. It also contains a lower threshold of votes for waiving 
the balanced budget amendment, which, of course, would make deficit 
spending much easier.
  The second mechanism in the Republican balanced budget amendment is a 
prohibition on any bill that increases taxes from becoming law unless 
approved by two-thirds of a rollcall vote of Members in each Chamber. 
When Congress cannot get its hands on enough revenue for its spending 
priorities, the temptation is always to look for more revenue and raise 
taxes. Well, it should be more difficult to take more money from the 
American people and to increase the size of the Federal Government.
  Moreover, raising taxes is not a productive solution to budget 
deficits. Not only does projected revenue usually fail to materialize, 
higher taxes discourage work, production, savings, and investment which 
all results in lower revenues in future years. So we cannot balance the 
budget by raising taxes.

[[Page 19807]]

  On the issue of tax increase restrictions, the Democratic alternative 
again falls short. It does not contain a mechanism to make it more 
difficult for Congress to raise taxes. In fact, it does the opposite. 
It contains a provision that makes it more difficult to lower taxes 
collected from American job creators.
  Some of our friends on the other side of the aisle will paint a 
doomsday scenario that they say would result from the Republican 
balanced budget amendment, one that would mean immediate changes and 
draconian cuts. That is not accurate. As we know, Congress cannot amend 
the Constitution. We can only propose an amendment for States to 
consider in a ratification process that takes a long time. If it 
passed, the balanced budget amendment would not become effective until 
5 years after ratification by three-fourths of the States. So it is not 
like we have some immediate concern that next year's budget is going to 
suffer if the balanced budget amendment were to pass.
  Let's not punt again on getting our spending under control. Let's not 
keep kicking the can down the road. Let's put on some real constraints 
so Congress will have to do its job, the job the American people expect 
it to do.
  I urge my colleagues to vote in favor of the Republican-offered 
balanced budget amendment.
  The PRESIDING OFFICER. The Senator from Ohio.
  Mr. PORTMAN. Mr. President, I rise today to join Senator Kyl in 
supporting the balanced budget amendment that Senators Lee and Hatch 
have crafted. I commend them for their hard work, and I particularly 
thank Senator Hatch for his principled leadership over the years in 
this effort. In the mid-1990s he almost got us to a balanced budget 
amendment to send to the States, and this time I hope he--showing his 
leadership again--will be successful.
  Washington's runaway spending and crippling debt burden underscore 
the need for us to have a balanced budget in this country. If 
Washington doesn't stop spending more than it takes in, I fear there 
will be an economic collapse, and, perhaps more profoundly, it will 
threaten the very foundation of our Nation--the freedom of individuals 
to thrive and to prosper.
  There is plenty of evidence to show that the huge debt burden we have 
is already crippling the economy. There was a recent study done by 
respected economists Carmen Reinhart and Kenneth Rogoff that shows that 
the debt burden of 90 percent of the economy will reduce a country's 
economic growth by 1 or 2 percentage points. Our gross debt right now 
is 100 percent of our economy. Growth this year is likely to be closer 
to 2 percent total, pretty weak growth. So 1 percent to 2 percent more 
would mean a 50-percent or even a 100-percent growth increase in this 
country. This means over 1 million new jobs could be created right now 
if we didn't have these huge deficits building up annually to a record 
debt that is now over $15 trillion.
  It is unacceptable that we have the economic growth that we do 
because it is keeping people from achieving the opportunities they seek 
at a time when there are almost 22 million Americans who are unemployed 
or underemployed, and we need to do everything we can to give the 
economy a shot in the arm. Part of it is getting our fiscal house in 
order and stopping this record deficit and debt. We should not condemn 
people to chronic unemployment through inaction in Washington.
  However much lawmakers at times want to do the right thing, it seems 
as though the political system and the budget rules around here create 
a bias for spending and deficits. When I left the post as Director of 
the Office Management and Budget in the last Presidential 
administration--that was in 2007--the budget deficit was $161 billion, 
which is about 12 percent of today's budget deficit, and I thought that 
was way too high. In fact, that year I proposed, on behalf of the 
President, a budget that actually balanced over a 5-year period because 
at that time we were so concerned about growing deficits and debts. 
Again, that was only 12 percent of today's deficit.
  In that time, as OMB Director, I was convinced that we need to have a 
discipline in Washington to balance the budget because we need to have 
some incentive to prioritize. Washington, again, seems to have this 
bias toward spending and deficits that I think can only be resolved 
through what 49 States have, which, again, is this power to be able to 
tell the elected representatives that we have to figure out how to 
prioritize; we have to figure out how, at the end of the day what every 
family in America does, what every business in America does, which is 
to figure out how not to spend more than we take in.
  Study and experience led the Founders of our country to create the 
best system of government ever devised: a Republic with enumerated 
powers. Similarly, study and experience should lead us to enact a 
balanced budget amendment. The times demand it. We need to reverse this 
system's bias in favor of deficits and debts. We need a balanced budget 
amendment in order to preserve the Founders' vision of a limited 
government of enumerated powers.
  But the fact is, Congress has not been able to get its spending under 
control through any other means. Some have called for a far higher tax 
rate. In other words, instead of dealing with the spending that is 
increasing dramatically--by the way, spending has gone up 21 percent 
just in the last three years. But instead of dealing with that, people 
say: Why don't you just raise taxes to catch up with the spending? That 
way we would have a balanced budget through higher and higher revenues.
  I guess what I would say is, Congress has a spending problem not a 
revenue problem. The growth in the entitlement programs, of course, is 
the long-term driver of this spending problem. The cost of these 
entitlements, along with interest on the debt, is projected to squeeze 
out the cost of every other Federal program within the next couple of 
decades, leaving little to nothing for other government priorities.
  People say, well, the revenues as a percent of our economy are 
relatively low now, and that is true. Coming out of the recession, we 
have not had the growth we had hoped for and that has resulted in lower 
tax revenues coming in.
  Historically, tax revenues have been 18 percent of our economy. Today 
they are lower than that and closer to 14.5 to 15 percent. Spending has 
been at about 20 percent of our economy historically since World War 
II. Today, that spending is over 24 percent of our economy.
  What happens over the next several years, based on the Congressional 
Budget Office analysis, is the revenues begin to increase as a percent 
of the economy even if the 2001 and 2003 tax relief is not continued. 
In that case, the revenues increase even more dramatically up to 21 
percent or 22 percent of the economy.
  So the fact is, the spending is on a trajectory to go up from a 
historic 20 percent to 24 percent now to 30 percent to 40 percent to 50 
percent over the decades. We cannot catch that spending with enough 
taxes. It simply cannot be done and have a viable economy. So we have 
to deal with the spending side of the ledger. Even if we do raise taxes 
to chase the trajectory, we will upset that balance between the Federal 
Government and a free, robust private sector that encourages innovation 
and gets people back to work.
  If the Federal Government ends up taxing every dollar of earnings, we 
will have taken away the space for Americans to pursue and enjoy the 
rewards of their hard work, risk-taking and innovation. The Founders 
might have used another phrase to describe what a free economy 
promotes: life, liberty, and the pursuit of happiness. Today we are 
talking about how we ensure that we have economic growth so that we can 
bring back the jobs, and that will not happen through the level of 
taxation that would be required to catch up to the record levels of 
spending.
  To address Washington's natural inclination toward taxing and 
spending,

[[Page 19808]]

a successful balanced budget amendment needs to do more than just 
require the outlays be less or equal to receipts. Again, it should 
include a spending cap because of the problems I have talked about with 
regard to the projections by the nonpartisan Congressional Budget 
Office over the coming years and decades. It should also demand a 
supermajority should Congress seek to enact antigrowth tax hikes.
  I think this balanced budget amendment, crafted by Senators Hatch and 
Lee, by doing that strikes a good balance. It also addresses the 
concern about a balanced budget amendment limiting the Federal 
Government's ability to spend in a time of war. If there is a 
declaration of war against a nation-state, a majority vote in both 
Houses would allow for deficit spending. If the Armed Forces are 
engaged in a military conflict that has not been given a full 
declaration of war, a three-fifths vote in both Houses would allow for 
deficit spending. This is in keeping with the intention of the 
Founders.
  In Federalist 34, Alexander Hamilton drew a distinction between 
monarchies and republics. He said, the chief source of expense in every 
government was defense spending. But republics, Hamilton counseled, 
should not use this to live beyond their means. He wrote:

       There should be as great a disproportion between the 
     profusion and extravagance of a wealthy kingdom in its 
     domestic administration, and the frugality and economy which 
     in that particular become the modest simplicity of republican 
     government.

  Washington has spent and overspent. This has led us away from that 
frugality that was the intention of our Founders. A balanced budget is 
the only way to get back to frugality and to that ``modest simplicity 
of republican government.'' And that is republican with a small ``r.''
  If we don't restrain spending through a balanced budget amendment, we 
will effectively inhibit and ultimately undermine the liberty of the 
Americans. We will threaten the American dream, the hope that each 
generation is able to pass on to the next generation a better life so 
that they are able to flourish and to meet, again, their achievements, 
their objectives in life through opportunity that can be created 
through a growing economy.
  It is time for Congress to prioritize. It is time for Congress to 
make tough decisions. We should do it with the discipline of a balanced 
budget. Time has shown us there is a need for a requirement to make 
those decisions.
  My home State of Ohio has that discipline. In fact, over the past 
year, Ohio has had to make some tough decisions to close a budget gap 
of about $8 billion. Here in Washington, we have a budget gap that is 
far higher. This year the government will bring in about $2.2 trillion 
and spend about $3.7 trillion. This gap is huge and growing, and just 
as 49 States do, we need to discipline Washington to force Congress to 
make these tough decisions to prioritize on behalf of the American 
people so that we don't have this crippling effect on economic growth, 
so that we can begin to see the kind of robust recovery we hope for 
coming out of the recession.
  For all these reasons I urge my colleagues to join me in support of 
the Hatch-Lee balanced budget amendment.
  I yield the floor and note the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. BROWN of Ohio. Mr. President, I ask unanimous consent that the 
order for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BROWN of Ohio. Mr. President, I ask unanimous consent to speak as 
in morning business for up to 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The remarks of Mr. Brown of Ohio pertaining to the submission of S. 
Res. 347 are printed in today's Record under ``Submitted 
Resolutions.'')
  Mr. BROWN of Ohio. Mr. President, I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. LEVIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Bennet). Without objection, it is so 
ordered.
  Mr. LEVIN. Mr. President, Congress cannot absolve itself of the 
responsibility to balance the budget by passing a constitutional 
amendment. Congress has an existing constitutional duty to control the 
purse. If Congress has the will to balance the budget, it can do so. If 
it does not have that will, no constitutional amendment can be a 
substitute.
  We knew that in 1996, which I believe was the last time the Senate 
seriously evaluated a balanced budget amendment. While we did not pass 
the balanced budget amendment, we did adopt budgets and policies that 
created the first surpluses in decades, enabling the United States to 
begin to reduce its debt load. Unfortunately, that fiscal sensibility 
was washed away by irresponsible, unfunded Bush tax cuts in 2001 and 
2003 and two unfunded wars. Once again, we find ourselves in a deep 
fiscal hole.
  We can and must dig ourselves out of it, as we did in the 1990s, by 
taking a balanced approach, restoring revenues, and making sensible 
spending cuts. But that is not a constitutional question. That is a 
political one. Can we, as a Congress, pass the tough measures needed to 
restore fiscal discipline?
  I have proposed a seven-point plan for reducing the deficit. 
Bipartisan commissions have proposed making spending cuts and 
increasing revenues and realistic folks from all parts of the political 
spectrum agree Congress needs to address revenues, as well as spending, 
if we are to achieve real deficit reduction.
  Congress needs to make tough choices and is failing to do so. One 
more procedural promise--this time in the form of a constitutional 
amendment--is not going to get the job done.
  While the details of the two amendments before us differ in many 
respects, there are real questions as to how either could be enforced.
  For instance, the Udall amendment says:

       The Congress shall enforce and implement this article by 
     appropriate legislation, which may rely on estimates of 
     outlays and receipts.

  What would happen if Congress failed to adopt the implementing 
legislation that lives up to the terms of the amendment? If it does not 
have the will to make cuts and raise revenues, what makes people think 
Congress will be able to agree on implementing legislation?
  The amendments raise far more questions than they answer. For 
example, would a court be willing to hear a case alleging a failure by 
the Congress to fulfill its duties or would a court treat such a 
challenge as a political question that is beyond its reach? Who would 
even be able to bring a case alleging a violation? Who would the case 
be brought against and what would the remedies be?
  Could a judge nullify a budget or a law on the basis that it somehow 
violated the amendment? Which appropriations bill pushed us over the 
limit--the last one adopted?
  Would a judge have the power to put the budget in balance by ordering 
specific spending cuts? How would those cuts be identified and set? 
Would the judge be tasked with reviewing the entire Federal budget and 
then making cuts? Would the judge be able to compel Congress to enact 
cuts? What would happen if Congress failed to comply with such an 
order? Does the judge make changes and substitute his or her priorities 
for those of Congress?
  These same questions could be asked about revenue increases as well. 
A judge cannot mandate revenue increases under the McConnell amendment. 
The resolution, apparently, would allow judges to make spending cuts, 
however. But that dangerous shift of power to the judiciary arises only 
by implication in the McConnell resolution. What is explicit under 
McConnell is that taxes and revenues can only be raised by a two-thirds 
vote. So even

[[Page 19809]]

closing loopholes to end tax dodges and raise revenue would require a 
supermajority. That is the opposite of a balanced budget amendment 
provision. That makes it more difficult to balance the budget.
  The American people do not need new processes or hollow promises. 
They do not need a constitutional amendment that raises more questions 
than it answers. They need Congress and the President to do our jobs. A 
balanced budget amendment will not force Congress and the President to 
do anything, because it is, as a practical matter, unenforceable. And 
when it does not work, public cynicism would only deepen. It already is 
plenty deep. There is only one way to balance the budget. That is with 
the willpower to make the hard choices. Those of us elected to public 
office have that obligation now. And if we fail, we as individuals will 
be judged by our own electorate.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. LEE. Mr. President, I stand today to urge my colleagues to 
support one of the most important pieces of legislation that has come 
before this body in decades, Senate Joint Resolution 10, the Hatch-Lee 
balanced budget amendment proposal.
  The reason why I insist this is so important is because of a crisis 
we are facing today. We have accumulated about $15 trillion in 
sovereign debt on behalf of the United States--$15 trillion. It works 
out to about $50,000 for every man, woman, and child in America. This 
is an amount of money that could represent an expensive car. It could 
represent a college education. It could represent all kinds of things. 
But it represents ultimately debt that Congress has incurred, debt that 
Congress cannot afford to continue to incur at this same rate, which we 
are doing every day. We are adding to that debt at an unsustainable 
rate of about $1.5 trillion every single year.
  Here is why that is so distressing to me. As the White House itself 
acknowledged a few months ago, we are now within about a decade, 
perhaps much less, of owing about $1 trillion a year just in interest 
on our national debt. Currently we are paying a little over $200 
billion a year in interest. By the end of this decade, that number is 
likely to rise to an astounding $1 trillion a year. We could reach that 
number much sooner than that. It could happen perhaps in half that 
amount of time if interest rates suddenly started to climb, as they 
easily could do, particularly given the fact that we are about 350 
basis points below the historic average for yield rates on U.S. 
Treasury instruments, the means by which our governmental debt is 
financed.
  We have to get this problem under control now, because if we wait 
until then, until we have to pay $1 trillion a year in interest on our 
national debt, it will be too late to do anything. By waiting, by 
postponing the day of our accountability, we will have made a choice, a 
devastating choice, that will prove to signal the downfall of the 
greatest economy the world has ever known. We cannot allow that to 
happen--not now, not on our watch, not when the stakes are this high.
  If we have to make up that difference, the difference between the 
$200 billion a year we are paying now and the trillion a year we will 
have to be paying in interest on our national debt a few years from 
now, that money has to come from somewhere. That money is not something 
we can expect simply to obtain through an increase in taxation.
  Over the long haul, we have learned that our tax system is capable of 
generating a revenue stream equaling a little over 18 percent of all of 
the revenue that moves through the American economy every single year--
a little over 18 percent of our gross domestic product. As this chart 
shows, that percentage remains relatively constant. It has remained 
that way for many decades, going back to at least 1960. It averages out 
a little over 18 percent of gross domestic product.
  That remains true even when we go back 30 years or so when our top 
marginal income tax rates were approaching 90 percent. The economy 
finds a way to produce no more than a little over 18\1/2\ percent--a 
little over 18 percent of GDP. So we cannot just raise taxes at that 
point in order to generate more revenue, because our income tax system, 
no matter how we tweak it, no matter how high we raise top marginal 
rates, is not capable of generating that much revenue. What we do when 
we simply ratchet up those tax rates, if anything, is we shrink the 
size of our economy. We chill economic growth to the point where we are 
actually generating less revenue, not more. So we cannot tax our way 
out of that problem, nor can we at that point simply borrow our way out 
of that problem. In other words, we cannot borrow an additional $800 
billion a year on top of the present-day $1.5 trillion a year we are 
borrowing, because if we did that, our interest rates would go up that 
much more. That would make our decision that much more crippling on our 
economy.
  There are a lot of reasons why this matters. My colleague from Ohio, 
Mr. Portman, acknowledged a few minutes ago that this chills job growth 
when we have this much debt. It is also true that this impairs our 
ability to fund every conceivable government program from defense to 
entitlements, such that if we wait in order to make the necessary 
changes to the way we spend money in Washington, we will wait at our 
own peril. We will wait at the peril of those who have become dependent 
on those very government programs that will have to have their budgets 
slashed immediately, abruptly, severely. We cannot afford to do that. 
Those who have become dependent on Social Security, on Medicare, on 
Medicaid, on other entitlement programs, on supplemental nutritional 
assistance, would be devastated if all of a sudden we cut off funding 
for those programs, we had to slash those budgets by 30, 40, 50 percent 
overnight. It is these abrupt changes that prove most difficult for our 
economy to absorb.
  I have often said it is something that we can analogize to being on 
top of a large building. Let's say our $15 trillion debt can be 
compared to a 15-story building. If you need to get down off of that 
building, you need to get to the ground floor. If you want to do it 
quickly, you could decide to jump. If you decide to jump, it is not the 
fall that will kill you, it is the abrupt halt at the end of that fall. 
So you need to do something to cushion the fall, to slow it down a 
little bit so it can be accomplished gradually, so nobody gets hurt. 
That is where the balanced budgeted amendment comes in. The Hatch-Lee 
balanced budget amendment, Senate Joint Resolution 10, would bring 
about severe, significant, systemic changes, but it would do so 
gradually so that the cuts, while significant over the long haul, are 
not abrupt, so that the impact is not severe, other than avoiding the 
severeness of the impact that would otherwise occur.
  We have to get down from that 15-story building, from that $15 
trillion debt. We do that through a balanced budget amendment, one like 
Senate Joint Resolution 10, which contains a 5-year delayed 
implementation clause. That would give us time to work out a phased-in 
glidepath toward balancing our budget. That is what we need do in order 
to protect and preserve our economic stability, our jobs market, and 
our ability within the Federal Government to fund everything from 
defense to entitlements.
  Those who ignore the need for this amendment ignore the fact that our 
spending continues to escalate. I want to talk about how much we have 
spent as a country as a percentage of our overall economy, as a 
percentage of our gross domestic product. Between the early 1790s and 
the early 1930s, the Federal Government spent, on average, between 2 
and 4 percent of gross domestic product every single year with only two 
notable exceptions, once during the Civil War and the second time 
during and in the immediate aftermath of World War I. With those two 
exceptions, Congress's spending was modest, between 2 and 4 percent of 
GDP.
  That all started to change in the early 1930s when we reached the 
double digits during peacetime for the first time in our history. We 
have, unfortunately, never retreated from that

[[Page 19810]]

cycle. Federal spending today, as a percentage of GDP, stands close to 
25 percent, meaning that for every dollar that moves through the 
American economy, a quarter of that goes to Washington, is sucked in by 
the Federal Government, and cannot move on and help to continue to 
stimulate the economy.
  That pattern of increased Federal spending as a percentage of GDP is 
expected to increase in the next few years. It is expected, based on 
the data provided by the Congressional Budget Office, to reach 26.4 
percent of GDP within the next 10 years, by 2021. Some say that figure 
is too optimistic and that it could actually be much higher than that, 
it could be significantly higher than 30 percent. At a minimum, we know 
it will be 26.4 percent or more unless we take pretty significant steps 
to control our spending.
  So I find it interesting that many are saying we do not need to make 
changes, that we can somehow have Congress do its job, that Congress 
needs to follow the Constitution and do its job and balance its budget.
  Let me tell you the problem with that. First of all, there is nothing 
currently in the Constitution that restricts Congress's power to borrow 
money. Clause 2 of article I, section 8 of the Constitution gives us 
power to do that, and we have done it. We have done it again and again 
and again. We have done it so many times in recent years that we have 
almost lost track.
  Congress first placed a statutory limit on the acquisition of new 
Federal debt in 1917, which was the Second Liberty Bond Act. Since 
1962, Congress has altered the debt limit through 74 separate measures, 
and has raised it 10 times since 2001, in the last 10 years.
  Since 1990, the debt limit has been raised by a total of $10.1 
trillion. Nearly half of that increase has occurred in the last 4 
years, since late 2007. So this is not a situation in which we are 
seeing the normal growth of government spending, either in normal 
numbers, in numbers adjusted for inflation, in numbers measured as a 
percentage of GDP. By any metric, the amount of Federal spending and 
the amount of debt acquisition has grown exponentially, giving us this 
hockey stick-like curve in the acquisition of Federal debt.
  We cannot continue this practice. We especially cannot continue it 
given the fact we know that the natural limit on our ability to receive 
revenue through the income tax system is a little over 18 percent of 
GDP. So we have to have something in place that keeps us from spending 
more than we take in. That cannot possibly by accomplished, in my 
opinion, without something that ups the ante, something that makes it 
structurally more difficult on a permanent basis for Congress to engage 
in deficit spending and to spend more than 18 percent of GDP. That is 
why there are a few critical features in Senate Joint Resolution 10, 
the Hatch-Lee balanced budget amendment proposal, that I think any 
viable balanced budget amendment proposal ought to have. First, it 
needs to apply to all spending. Second, it needs to cap spending at 18 
percent of GDP. It also needs to require a supermajority vote in order 
to exceed that percentage of GDP spending limit in order to raise taxes 
or in order to raise the debt limit. Without these kinds of provisions, 
this kind of redundant protection against the inexorable growth of 
Federal spending generally, and the inexorable growth of deficit 
spending in particular, our debt will crush the very programs we 
purport to be protecting.
  Those who plot against this say we cannot limit spending to 18 
percent of GDP or else we will hurt program X, Y or Z. While they are 
making this argument, it is in reckless disregard of the fact that 
those same programs will be jeopardized if we continue to borrow 
recklessly, without structural spending restraint or reform on the 
horizon.
  Others have argued we don't need this because somehow it is 
unenforceable. I am not quite sure what they mean. Perhaps they don't 
know what a court would do with it. They are forgetting we have other 
provisions in the Constitution that raise the vote threshold, which is 
essentially what the Hatch-Lee balanced budget amendment does. In other 
words, we have other provisions in the Constitution that are followed 
routinely, without the need for litigation, just based on Members of 
Congress taking an oath to uphold the Constitution, as we are all 
required to do pursuant to article VI. Those are complied with every 
day.
  For instance, we all know none of us will dispute the fact that it 
takes a two-thirds supermajority vote in both Houses of Congress to 
override a Presidential veto. It takes a two-thirds supermajority vote 
in both Houses of Congress to propose a constitutional amendment. It 
takes a two-thirds supermajority vote in the Senate to ratify a treaty. 
We don't dispute the fact that these vote thresholds exist. We don't 
have to wait for the courts to intervene for us to enforce them within 
Congress. We follow them. That is what this would do.
  This says that because Congress has the ability to destroy itself, 
destroy the economy, destroy the very government we have created 
through reckless, indefinite, perpetual deficit spending, we must 
protect Congress from itself--perhaps better said, we must protect 
people from Congress by requiring that Congress approve any amount of 
money spent in excess of what Congress brings in or in excess of 18 
percent of GDP or in excess of the debt limit by a supermajority vote. 
We have to have that. It will be followed, and it is absolutely 
necessary.
  It is interesting that few, if any, of my colleagues will dispute the 
fact that Congress should balance its budget. There is perhaps a 
difference of opinion--maybe even a widespread difference of opinion--
as to how best we should try to close this gap, how best we should 
close the gap between the money Congress brings in each year through 
the tax system and the money it spends. There is widespread dispute 
about where cuts need to be made. I think we all agree we need to 
balance our budget.
  That begs the question, if we all agree, as I think we all do, then 
why can't we agree we need to adopt a permanent structural mechanism 
that will be embodied in the Constitution that will ensure that 
actually happens? This proposal remains agnostic as to where cuts will 
be made. All it says is if we are going to spend more than we take in 
or more than 18 percent of GDP or raise taxes or the debt limit, we are 
going to do it by a supermajority vote. That is something the American 
people support. In fact, 75 percent of the American people support the 
basic principle that Congress should not, for example, spend more than 
it takes in each and every year.
  That brings me to the question of why it is that we should support 
S.J. Res. 10, the Hatch-Lee balanced budget amendment, and not another 
proposal--for example, S.J. Res. 24, which I might refer to 
alternatively as the ``Trojan horse'' balanced budget amendment or as 
the ``do nothing'' amendment proposal, which purports to be a solution 
when, in fact, it is not, for one simple reason: It gives Congress 
unfettered discretion to exempt itself out of the budget balancing 
requirement it contains. This would, in effect, I am certain, render 
this amendment, were it to take effect, virtually a dead letter 
provision.
  We have seen what Congress does when it has the option of exempting 
itself out of statutory spending caps--in the pay-go rule, the Gramm-
Rudman-Hollings Deficit Control Act, and in other statutory provisions 
such as this. Congress giveth and Congress taketh away. Congress has 
become a walking, breathing waiver unto itself. When Congress is given 
the option of saying: I know we are supposed to balance the budget, but 
we don't feel like it today, it ends up doing that. All Congress would 
have to do under S.J. Res. 24--the ``do nothing'' amendment proposed--
is simply acknowledge that the United States is involved in a military 
conflict, and by simple majority vote it can exempt itself out of these 
provisions entirely.
  By contrast, the Hatch-Lee balanced budget amendment proposal 
acknowledges that in a time of war or military conflict, it may be 
necessary to spend more than we take in. But in the case of an armed 
military conflict, it requires a three-fifths supermajority

[[Page 19811]]

vote, and in either a war or another armed military conflict, it 
specifically provides that in that war or conflict, any overage, any 
amount spent above and beyond what Congress brings in has to be limited 
to that required to prosecute that war or that military conflict 
effort. That is a huge difference. We can't simply give Congress the 
option of complying with a balanced budget amendment provision only 
when Congress feels like it. This is a little akin to telling an 
alcoholic they have to give up drinking, while leaving an open 
container of whiskey on the table and requiring that person to walk 
past that bottle or even to carry it around every day. It doesn't work. 
You have to take it out of the house. You certainly have to take it out 
of the possession of the recovering alcoholic.
  This is the challenge of our time--to figure out how to prevent 
Congress's chronic abuse of its own borrowing authority from collapsing 
under its own weight, from bringing about the economic collapse of the 
United States of America.
  We have to have these structural spending reform mechanisms because 
our government is run by imperfect people. Benjamin Franklin has often 
been quoted for a line that says: ``He'll cheat without scruple who can 
without fear.'' When looking at Congress today, we might say Congress 
will spend more money than it has whenever it possibly can, whenever it 
has the option of spending more.
  As Madison said: ``If men were angels, no government would be 
necessary. And if angels were to govern men, neither external nor 
internal controls on government would be necessary.''
  We are, as human beings, not angels, and our government isn't run by 
angels either. This is why we need the structural permanent spending 
reform mechanism. We cannot afford to accept a substitute, a cheap 
imitation, a ``Trojan horse'' balanced budget amendment such as S.J. 
Res. 24, because if we adopt something such as that, we will create the 
illusion to the American people that we are actually undertaking 
efforts to control our out-of-control deficit spending program when, in 
fact, we are doing nothing. Because it is always the case that we are 
involved in a military conflict somewhere. Congress will always be able 
to muster a simple majority, saying we cannot be expected to balance 
our budget because of that.
  We have to draw that line in the sand and stand for those who support 
everything from defense to entitlements. We have to stand for our 
children and our grandchildren, those who will come after them, those 
who are not yet old enough to vote, those who have not yet been born 
and whose parents have yet to meet. Those people are not here to vote 
against us as we spend their money.
  This is a particularly pernicious form of taxation without 
representation. We fought a war over two centuries ago over that 
practice, and we won that war. We should not subject our children, 
their children, and their grandchildren after them to that same 
practice. This is contrary to liberty, contrary to economic prosperity. 
We cannot stand for it to occur anymore.
  We have two choices. One choice involves supporting, passing, and 
submitting to the States for ratification of the Hatch-Lee balanced 
budget amendment proposal, putting in some permanent restraint, at long 
last, on Congress's self-destructive borrowing capacity.
  The other option can take many forms. It can take the option of 
supporting S.J. Res. 24, which doesn't solve the underlying problem, or 
it can take the form of doing nothing at all. If we do nothing, we have 
still made a choice--a devastating choice--a choice that will inure to 
the detriment of the American people and of the Federal programs that 
we all rely on, the Federal programs that people rely on to keep them 
safe, protect them from the ravages of nature, and protect them from 
the conditions of poverty we seek to avoid in this country. It is, 
after all, the objective of us all to seek a better, more prosperous, 
more safe country, but we jeopardize all those interests the longer we 
allow this practice of perpetual deficit spending to continue.
  At the end of the day, we have to face our own constituents. Those 
who choose not to vote for the Hatch-Lee balanced budget amendment will 
have to face their constituents and tell them why they were unwilling 
to stand for a proposition so basic as we should balance our budget.
  There is no excuse, based on the fact that we cannot do this 
overnight, because it has a delayed implementation clause. It will not 
take effect until 5 years after it has been ratified by the States. In 
the meantime, we will be able to set in motion a sequence of events, a 
series of implementing bills that will allow us to put ourselves on a 
smooth glidepath toward balancing our budget. We will be able to do 
that. Those who vote against this cannot look their constituents in the 
eye and tell them they did everything they could do to get our out-of-
control spending habits or our out-of-control deficit spending habits 
under control.
  I urge each of my colleagues to do this for themselves, for the 
programs they want to save, and for their children and grandchildren. 
Our prosperity, our success as Americans, our survival as a nation, and 
the success of our government requires nothing less.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. KIRK. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. KIRK. Mr. President, I rise to talk about the balanced budget 
amendment. It is obvious America's government is spending, taxing, and 
borrowing too much. That is why Congress should approve the balanced 
budget amendment to the Constitution. It was a good idea when Thomas 
Jefferson supported it, and it is an even better idea today.
  America is a great experiment in self-government. Self-government 
requires self-control. Early thinkers about America's democracy worried 
about the capacity of the government to borrow in a way that would 
cripple our freedom.
  Children cannot vote, but the Congress of their parents can put our 
kids into debt. We should fight fiscal child abuse by ending such 
borrowing that hurts our kids' long-term economic future.
  In recent days, we witnessed clear warning signs that the days of big 
borrowing are ending, not because Congress has changed its free-
spending ways but because lenders are increasingly worried that they 
will never be repaid. This summer, America lost its triple-A credit 
rating, according to Standard & Poor's. This loss of confidence mirrors 
a crisis in Europe reflecting a collective judgment that Greece and 
Ireland and Portugal and Spain and even Italy may not be able to repay 
the amount of money they have borrowed. As Prime Minister Thatcher 
reportedly said, ``Eventually governments run out of other people's 
money.''
  In this environment, it is important to show how we are different 
from Europe. If we approve the balanced budget amendment and cut 
spending, we will restore confidence in the Federal debt, in America's 
economy, but most important, in the ideal of self-government.
  America owes $15 trillion or about $40,000 for each new American 
born. For their sake, we need to restrict the ability of the current 
generation to obligate young Americans to pay their debts.
  Should this amendment fail, we will wound the long-term credit of the 
United States. More deeply, we will hurt the ideal of self-government 
and self-control that is the foundation of our freedom.


                                 Egypt

  I would like to take this moment to talk about another issue; that 
is, we as Americans support freedom and democracy and the rights of all 
peoples. But, as Gaza taught us in 2006, free elections by themselves 
do not make up a democracy. There are times when people are offered a 
chance to elect party leaders who offer them only one election to 
affirm a dictatorship. We can

[[Page 19812]]

also learn from the year 1938 that the dangers of ignoring developments 
abroad are huge. Now, in the wake of the Arab Spring, we turn away from 
that region at our own peril.
  On November 28, the first stage of the Egyptian elections began, 
which will inaugurate a new electoral system forming a bicameral 
legislature. This first stage determines about 30 percent of the 498 
seats for the government's lower chamber, called the People's Assembly.
  Before Egyptians arrived at the polls, protesters filled Tahrir 
Square in Cairo. As a result, over 40 Egyptians were killed. Many are 
objecting to the military's interference in the electoral process and 
the decision to force elections well before secular parties had time to 
build their capacities. According to public polling and sources on the 
ground, this will likely hand an electoral victory to the Muslim 
Brotherhood and more radical Islamist elements within the Egyptian 
society. Although elections will last until March of 2012, the 
prediction of a Muslim Brotherhood victory is already becoming a 
reality. Early data shows an alarming trend of Islamist domination of 
the Egyptian Parliament.
  On December 5, the High Electoral Commission announced that leaders 
of the Freedom and Justice Party, the political arm of the Muslim 
Brotherhood, had received a plurality of 36 percent of the vote, while 
the secular Egyptian Bloc had gained less than 12 percent. When we 
include the runoff elections, which took place last week, it appears 
that the Muslim Brotherhood has won 73 out of 150 seats or 49 percent 
of the currently contested outcomes. This is the same party that led a 
pre-election rally of 5,000 chanting ``one day we shall kill all the 
Jews'' and ``Tel Aviv, Tel Aviv, Judgment Day is coming.''
  While many expected the Brotherhood to do well, there were other 
surprises. Salafist parties, made up of anti-Western hardliners who 
follow a particularly radical version of Islam, are also faring 
particularly well. Surpassing predictions, they received 24 percent of 
the vote in the first round.
  Importantly, these elections also included the so-called liberal 
districts of Cairo and the Mediterranean port city of Alexandria. The 
weakness of liberal parties--namely, their inability to reach out to 
voters effectively with a serious agenda--is now fully exposed. 
Islamists are taking full advantage of deeply rooted networks that 
extend from the mosques into Egypt's poor districts. Their grip in the 
traditionally conservative areas of Alexandria proved particularly 
tight, and these areas are also home to a majority of the Coptic 
Christian community.
  It is clear that if Islamist parties and candidates continue their 
currently won gains in other elections, they will capture 60 percent of 
the national vote in Egypt. This will situate the new Egyptian 
Parliament around deep ideological differences between Salafis, the 
Muslim Brotherhood, and liberal groups, making the Brotherhood the 
power brokers between Egyptian left and right.
  What does this all mean? By January, the United States could face an 
Egypt defined by a hatred of Israel and many of the freedoms we hold 
dear--a freedom of expression, of women's rights, and the right to 
practice any religion. This Egypt counts Iran as a friend and poses a 
threat to the Camp David Peace Accords, which have served as the 
cornerstone for Egypt's strategic position for 30 years.
  Do we expect that an Islamist-led Egypt will prevent weapons from 
arriving in the hands of Hamas? Will an Islamist-led Egypt help 
preserve a free South Sudan? Will an Islamist-led Egypt act to protect 
Coptic Christians who make up about 10 percent of Egypt? Will we see 
continued violence, as we saw on October 9 in Maspero, which killed 27 
civilians and injured hundreds? Will an Islamist-led Egypt do what we 
expect with more than $1 billion of U.S. foreign assistance? Will they 
continue to share intelligence and to work against terrorism? These are 
all questions that may become critical issues for the national security 
of the United States very shortly.
  All of this instantly prevents foreign investment and tourism that 
would help the Egyptian economy. The IMF has forecasted a little over 1 
percent growth for the Egyptian economy next year. They said inflation 
will top 11 percent, while almost 12 percent of Egyptians will be out 
of work. Recently, the Egyptian pound traded at its lowest level 
against the dollar in 7 years.
  This time last year the region was on the threshold of exciting 
change, but today Egypt sits instead on the threshold of a very 
dangerous path.
  The United States--and especially our State Department in 
particular--should do what it can to keep Egypt attached to peace and 
good relations with the West. The United States is now on the verge of 
a historic defeat and reversal of American interests in Egypt. 
Currently, if there is an Obama administration plan for handling a new 
Islamist Egypt that rejects peace with Israel and allies with Iran, I 
don't know it, and I don't know if anyone does. We must keep our finger 
on the pulse of this process. Liberal voices in Egypt must work to 
preserve the democratic goals of the January revolution.
  Recently, I had the privilege of meeting some of Egypt's best and 
brightest young liberal leaders. They would like to build a free Egypt 
that respects women's rights and religious minorities and the rule of 
law. I was encouraged in meeting with them but only hope that the 
coming election is not like a 1930s election in Germany, where people 
in Egypt are given one choice--to affirm a dictatorship--and then that 
is the end.
  If a radical Islamic government arises in Egypt--one that disavows 
the Camp David Peace Accords and no longer acts as a stable strategic 
partner in the Middle East--then we will look back on the recent 
election in Egypt and its successors in December and January as the 
turning point for a historic reversal of the United States.
  My hope is that the State Department watches this very carefully. My 
hope is that we have a plan to make sure this critical country stays 
within the U.S. orbit. But my fear, given the recent elections in 
Egypt, is that we have already lost quite a bit of ground.
  If current trends continue, then by the middle of next year we will 
have a Muslim Brotherhood government in command of the Suez Canal, in 
charge of Cairo--the second center of learning in the Arab world--along 
the border of our Israeli allies, friendly to Hamas, friendly to Iran, 
and hostile to Europe and the United States. My hope is that over the 
holidays we will work very hard and diligently with our allies--and 
especially liberal forces in Egypt--to make sure that reversal doesn't 
happen.
  With that, Mr. President, I yield the floor, and I suggest the 
absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Udall of Colorado). Without objection, it 
is so ordered.

                          ____________________